ICYMI: Rep. Brady Legislation Holds Governors Accountable for COVID-19 Relief Funds

June 11, 2020 — Coronavirus Bulletin   

Americans for Tax Reform

Rep. Brady Legislation Holds Governors Accountable for COVID-19 Relief Funds

By Tom Herbert

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The Coronavirus pandemic has imposed enormous damage to local communities across the country. However, many governors are withholding relief federal relief funds from localities and rural communities. In response to this, House Ways and Means Ranking Member Kevin Brady (R-Texas) has introduced H.R. 7065, legislation that would prevent governors from hoarding Coronavirus relief funds appropriated for local governments.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act established a $150 billion Coronavirus Relief Fund (CRF) for states, territories, tribes, and local governments. Much of this funding is being withheld, according to a May report from the National League of Cities.

The report found that 32 states are withholding COVID-19 relief funds from local governments and rural towns, preventing critical resources from being used to help Americans in need. Democrat governors like J.B. Pritzker of Illinois, Gretchen Whitmer of Michigan, and Laura Kelly of Kansas have come under fire for failing to get these funds to their constituents.

Rep. Brady’s legislation would fix this by requiring any state that received CRF dollars to provide the Treasury Department with a plan for how they will distribute the money to local governments. If states fail to provide a detailed description of their process by June 12, 2020, Treasury’s Inspector General will claw back 25 percent of the funds previously provided to the state.

The fact is, any effort to deny localities CRF dollars is a blatant violation of Congressional intent.

As Treasury Department guidance has indicated, these funds were intended to help states and localities operate basic functions and cover costs directly related to the pandemic, like testing or procuring personal protective equipment.

Despite this clear intent, states are still “withholding funding from most” localities “with no indication when, or if, funds will ever be made available.”

Much like American businesses, these localities are struggling to keep basic functions in operation, and doing the best they can to serve their people in an unprecedented situation. If governors are hoarding funds Congress has expressly approved for these communities, it means that millions of Americans do not have access to critical resources they need to get through the pandemic.

Ironically, many of these states are run by Democrats that are pushing for the $1 trillion no-strings-attached state and local bailout in Pelosi’s misleadingly-named “HEROES Act.”

In contrast, Republicans have led the way to ensure that governors get resources to those that need them as quickly as possible. For instance, Republican members of the Michigan Delegation sent a letter to Democrat Governor Gretchen Whitmer requesting an outline of how federal money is being spent, saying:

“It was never Congress’ intent that these taxpayer dollars be kept from our local governments, many of which not only have urgent needs but also have the ability to quickly put these resources to work in rural and remote communities.”

Republican members from the Illinois delegation sent a similar letter to Democrat Governor J.B. Pritzker, noting that Illinois’s smaller towns were being left behind in accessing federal relief funds:

“We continue to hear from many of our local governments who are struggling because of the pandemic and stay-at-home orders that remain in place…This funding was passed on a bipartisan basis and released to states nearly a month ago to help local governments continue basic functions and we remain concerned that this funding has seemingly not been distributed.”

While these efforts are commendable, more action is needed to ensure governors are disbursing the funds appropriately.

As the focus turns towards reopening the economy and getting Americans safely back to work, it is critical that states and localities work together to mitigate the further spread of the Coronavirus.

If governors continue withholding this funding, the reopening process for localities could be complicated or delayed thanks to the artificial scarcity of resources the hoarding has created.

Congressman Brady should be applauded for holding governors accountable. Now, Congress should take up and pass H.R. 7065 so that localities receive the resources to help Americans in need.

Want to read more on the fight against Coronavirus? Read our Coronavirus Bulletin here which contains our extensive FAQ about recent federal actions.

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