State Governments Hoarding CARES Funds, Inspector General Data Shows

July 30, 2020 — Coronavirus Bulletin   

State and local governments have spent a minimal amount of funds allocated as part of Congressional relief packages, throwing cold water on calls from Democrats to give more to states as a next round of federal relief continues to be debated in Congress, according to the Treasury Inspector General.

The Inspector General published data showing how much each state was given from the federal government and how much each state has spent as of June 30th. While the report doesn’t reflect data for the month of July yet, it shows a stark picture of funds being hoarded and not reaching local and rural communities.

In Michigan, where Governor Gretchen Whitmer has demanded more federal funding this week, only 3 percent of the more than $3 billion the state received has been spent thus far.

And in New Jersey, where Governor Phil Murphy has levied complaints against the new Senate Republican proposal, the Treasury Department reports that only 2.1 percent of the funds they received have been spent.

Republicans in Washington have supported funding and flexibility, but are concerned that states are ignoring Congress’s intent in the CARES Act to ensure the funds get to those who need it.

Rep. Kevin Brady (R-TX), the top Republican on the House Ways and Means Committee, said that state and local governments don’t need more dollars, “they need the flexibility to use it where it is needed.”

“I support more flexibility,” the Texas Republican said. “Only if states and localities share CRF funding with smaller cities and rural counties as Congress intended.”

Mr. Brady has previously introduced legislation that would require states to submit a plan to the Treasury Department on where dollars were being spent, with the potential for funds to be pulled back without compliance.

The legislation came in response to a report by the National League of Cities, showing that by mid-May, 32 states were withholding federal funds from local governments.

This report sparked oversight from Republican delegations across the country. Republicans from Michigan sent a letter to Gov. Whitmer requesting information concerning the allocation of these federal funds. Republicans from Illinois and Kansas, including Ways and Means Committee Members Rep. Darin LaHood (R-IL) and Rep. Ron Estes (R-KS), sent letters to their states’ governors as well seeking information on where these dollars were going.

To learn more about this Treasury Report, CLICK HERE.

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