Wednesday, March 9, 2022

Wisconsin nearly lost $225 million in COVID money today. Then got it back

As I did my typical scanning of the Wheeler Report, I saw a press releases stating that Governor Evers "Blasts Congressional Leaders for Plan to Cut an Estimated $225 Million of Wisconsin’s American Rescue Plan Act Funds".

WHAT THE WHAT? Let's find out what Tony was angry about.
Gov. Tony Evers today, in a letter to Democratic and Republican congressional leadership, slammed a plan that would cut the state of Wisconsin’s American Rescue Plan Act allocation by an estimated roughly quarter of a billion dollars according to information received by the Evers Administration. In the midst of the one-year anniversary of the American Rescue Plan Act being enacted, Congress released an omnibus budget bill today that includes a provision that is expected to reduce several states’ shares of federal COVID relief aid under the American Rescue Plan Act.
Let me remind you that the state of Wisconsin already is getting $700 million less than they originally planned under ARPA, because our unemployment rate wasn't as bad as many other states by March 2021. In addition, the state only got half that amount last year and has to wait until this year for rest, for a similar reason.

And today Evers said that the state stood to get a sizable amount of 2022's already-reduced funds taken away.
This virus has not discriminated or abided by state borders based on economic data. While Wisconsin’s unemployment is at historic lows, our state nevertheless still faces many of the same challenges experienced by states across the country in ensuring our continued, long-term economic recovery. This fact has and continues to result in needing investments for the competing priorities of mitigating the ensuing delta and omicron variant waves of COVID-19 while also devoting maximum resources toward long-term investments that build a stronger Wisconsin and ensure our sustained economic recovery. For example, the fall and winter surges necessitated an increase in testing support for local communities beyond what could have been anticipated when federal funds were allocated to Wisconsin. The testing support was a critical tool in our efforts to keep our schools and economy open.

To that end, I write today because it would be unfortunate to honor the one-year anniversary of the American Rescue Plan Act—legislation that has been essential for our state’s and our country’s economic recovery—with an effort to arbitrarily retract aid from certain states. I understand today a version of the Consolidated Appropriations Act of 2022 was introduced that would further reduce funding for states for which Treasury previously decided to split payments. Under this provision, Wisconsin stands to lose roughly a quarter of a billion dollars—$225 million or more based on current information available. That is just not acceptable. I also understand this provision is perhaps rooted in the mistaken belief that these funds are not being spent. I can speak for Wisconsin when I say that is simply incorrect. I have directed the state to move quickly and purposefully to disburse funds in ways that meet the moment. To date, nearly $1.37 billion—an amount greater than Wisconsin’s first split payment—has already been obligated or expended for programs that fund local public health efforts, assist small businesses, enable services provided by nonprofits, and invest in broadband infrastructure. Hundreds of millions in additional funds have been awarded to organizations that are working through contract agreements or directed to programs in active development, totaling hundreds of millions of additional dollars for specific uses.

He's not so happy about this.

So how was this possible? It's because of today's bill in DC to avoid a shutdown and fund the US government for the rest of the 2022 Fiscal Year. In order to have an agreement get through the House and (filibuster-allowing) Senate, there was a scheme to use some of those state-designated ARPA funds to fight COVID in other ways.
At issue was part of the mammoth deal struck between Democratic and GOP leaders: Frustrated Democrats objected to how the bill would pay for the roughly $15 billion the White House had requested to to shore up the nation’s depleted pandemic funds. Party leaders agreed to fund some of that with unallocated money from state governments — but only the 30 states that received their emergency Covid cash from the Treasury in two separate tranches.
Once the scheme leaked out, it imploded, as Badger graduate Manu Raju documented for CNN.

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I’m lost on how Pelosi and Senators could have made that "offset" in the first place, because ARPA is already settled law, and the way they’re spending it has already been set aside. Is this the sort of thing where they have the bill written into law, but then it’s another act to actually get the money out? DC World, man. I dunno…..

This might not end up being a big deal in the long term if the full COVID funds come in another bill that isn’t tied to funding the rest of the Federal government for the rest of the 2022 Fiscal Year. It might have a better chance of passing on its own, especially if Republicans fear a political price for not helping replenish supplies and battle what remains of COVID for the rest of 2022.

It's not like we don't have the money for $15 billion to battle COVID going forward, especially as the US budget deficit is shrinking rapidly as the Biden Boom continues.
The federal budget deficit was $475 billion in the first five months of fiscal year 2022, the Congressional Budget Office estimates. That amount is less than deficits recorded during the same period in the two prior fiscal years: It is less than half the shortfall recorded for the same months in fiscal year 2021 ($1,047 billion) and three-quarters of the deficit recorded in 2020 ($624 billion), just before the start of the coronavirus pandemic. From October 2021 through February 2022, revenues were $371 billion (or 26 percent) higher and outlays were $201 billion (or 8 percent) lower than they were during the same period a year ago, CBO estimates.

Definitely seems like something to keep in mind if we see oil spikes and other Russia-related fallout hits our economy and budgetary needs in the next few months. We have a lot more fiscal space to withstand those issues .

I know “sausage-making” and all that garbage leads to weird stuff like today’s news about how Congressional leaders tried to cut COVID relief funds to states in favor of....other COVID relief. And it’s exacerbated by the stupid filibuster rules that allow 41 Senators who represent an even smaller fraction of Americans be able to block these things. But it will be nice to finally have our government fully funded 5 months after the Fiscal Year began, and I’m interested to see what baseline changes have been made for future plans as a result.

And from Wisconsin's standpoint, it looks like we're still in line to get all of the $1.25 billion we're supposed to get for 2022.

So all's well that ends well, right? Of course, that's assuming the funding bill actually gets through and we don't get a government shutdown next week at a time we should be only dealing with one type of March Madness.
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