Senator Schmitt’s Congressional Review Act Regarding Treasury’s Misuse of COVID Recovery Money to Be Voted on by the Senate

WASHINGTON – Tomorrow, the Senate will vote on a disapproval resolution under the Congressional Review Act aimed at the U.S. Department of Treasury’s misuse of COVID recovery dollars, and their redefining of the original intention of Coronavirus State and Local Fiscal Recovery Funds (SLFRF). Senator Eric Schmitt led a group of Senators in introducing the resolution in February:

“Treating taxpayer money allocated for COVID relief as a slush fund for pet projects by Biden’s Treasury is emblematic of Washington addiction to wasteful spending. Redefining a rule to allow for wasteful expenditures unrelated to COVID recovery will not only cost American families an extra $1,200 per year but perpetuates inflationary policies that have hurt working Americans. I’m proud of my work on this CRA and encourage the Senate to stop abuse of taxpayer dollars by this administration,” said Senator Eric Schmitt.

Senator Schmitt is joined by Senator Roger Marshall (R-KS), Senator Tom Cotton (R-AR), Senator Mike Braun (R-IN), Senator Marsha Blackburn (R-TN), Senator Rick Scott (R-FL), Senator Bill Hagerty (R-TN), Senator Cynthia Lummis (R-WY), Senator Ted Budd (R-NC), Senator Mike Lee (R-UT), Senator Pete Ricketts (R-NE), Senator Ron Johnson (R-WI), and Senator Joni Ernst (R-IA).

Representative Troy Balderson (R-OH-12) leads an identical resolution in the House of Representatives and is joined by Rep. Kevin Hern (R-OK-01), Rep. Ben Cline (R-VA-06), Rep. Michael Cloud (R-TX-27), Rep. Randy Weber (R-TX-14), Rep. Chuck Edwards (R-NC-11) Rep. Byron Donalds (R-FL-19), Rep. John Moolenaar (R-MI-02) Rep. Andrew Clyde (R-GA-09), Rep. Glenn Grothman (R-WI-06), Rep. Doug LaMalfa (R-CA-01), Rep. Kat Cammack (R-FL-03) Rep. Harriet Hageman (R-WY-AL) Rep. Beth Van Duyne (R-TX-24) and Rep. Jeff Duncan (R-SC-03).

BACKGROUND:

• The American Rescue Plan Act of 2021 (ARPA) provided $350 billion for the Coronavirus State and Local Fiscal Recovery Fund (SLFRF). The SLFRF was designed to aid state and local governments with COVID-19 economic recovery. 
• By statute, the ability to incur costs with SLFRF funds expires on 12/31/2024. In its original rulemaking, Treasury established that a cost is incurred “if the recipient has incurred an obligation with respect to such cost by December 31, 2024.” 
• In this new rule, Treasury has changed the definition of an “obligation” under the ARPA to allow states and localities to still spend this funding past 2024 so long as they report potential ideas on spending to Treasury in the next few months.  
• Alarmingly, the new obligations can only be for administrative and legal requirements and would not directly benefit taxpayers.
• An extension of COVID-19 era funding is especially perplexing as the Biden Administration ended the federal Public Health Emergency for the pandemic on May 11, 2023.

Definition of an obligation:

• In 2021, Treasury established that a cost is incurred “if the recipient has incurred an obligation with respect to such cost by December 31, 2024.”
• Yet, in November 2023, Treasury redefined an “obligation” differently, permitting recipients to make future agreements to spend SLFRF funds into 2026, not 2024. This tortured interpretation contradicts the basic definition of an obligation and Congressional intent.
• Treasury’s definition even goes against GAO’s definition of an obligation (published this November) that demonstrates the need for a present and definite agreement: a definite commitment that creates a legal liability of the government for the payment of goods and services ordered or received. . . . An obligation occurs, for example, when an order is placed, a contract is signed, a grant is awarded, or a service is purchased.

View the Senate Letter to the Treasury here.
View the bill text here.