Now, a new report said those governments are waiting for instructions on exactly what to do with that aid.
The Rescue Plan allocated a total of $350 billion, out of its $1.9 trillion overall price tag, to “states, municipalities, counties, tribes, and territories to help repair their coronavirus-damaged budgets and economies,” Reuters said.
The CARES Act in 2020 had distributed $150 billion to such governments, but this year’s allocation doesn’t necessarily have to go to spending priorities directly connected to the pandemic. The money can go for everything from plugging budget holes to giving essential workers “premium pay,” to invest directly in infrastructure. According to a USA Today report during the congressional debate back in early March, the Democrats in Congress had pushed for that $350 billion figure, but Republicans considered such spending wasteful.
"They want to send wheelbarrows of cash to state and local bureaucrats to bail out mismanagement from before the pandemic," Senate GOP Leader Mitch McConnell, R-Ky., said during the debate, per USA Today. "They're changing the previous bipartisan funding formula in ways that will especially bias the money toward big blue states.”
The Rescue Plan passed Congress along party lines, with Vice President Harris breaking a tie in the Senate, and using the budget reconciliation procedure.
When its comes to the state and local payments, the Reuters story said, many governments aren’t exactly sure how the payments will work, per the article- and the payments must be “out the door” by May 10, which is only in a couple of weeks.
The American Rescue Plan appears to allow states and cities a wide berth of what to do with the money, with a few exceptions. They cannot put the money towards pension obligations, nor can they use it to finance tax cuts. The latter provision led the state Attorney General of Ohio to sue the president back in March, a suit that was later joined by other state Attorneys General.
"There's just this wide berth of interpretation in the (legislative text) and that's why we're a little anxious to see if the Treasury guidance makes limitations or if it allows for greater opportunity,” Emily Swenson Brock, director of the Government Finance Officers Association’s Federal Liaison Center, told Reuters.
Ramsey County, the county in Minnesota that includes the city of St. Paul, has announced plans to use the money coming in to boost an affordable housing plan, according to the St. Paul Pioneer Press.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.