Editorial: Billions in pandemic relief money remains unspent

The pandemic may feel like ages ago, but the fiscal follies of COVID continue to wreak havoc with personal and government balance sheets.

Higher prices brought about by the Biden-Harris administration’s $2 trillion federal spending binge known as the American Rescue Act of 2021 continue to bedevil family budgets. Although 9 percent inflation has receded, the costs of everyday staples remain stubbornly high.

At the same time, Washington is awash in free-flowing red ink. The deficit has soared nearly $8 trillion under the current president and now approaches an unfathomable $36 trillion.

It is against this backdrop that billions in federal pandemic sent to states and local governments sit unspent more than three years later. Out of the approximately $325 billion sent to various jurisdictions to mitigate economic shutdowns and other pandemic-related disruptions, some $92 billion sits idle and $53 billion has yet to be earmarked for any purpose, according to a General Accounting Office report earlier this year.

Under the law, states and local governments have until the end of this year to “obligate” their money and the end of 2026 to actually spend it. But is it any surprise that the wheel of public-sector bureaucracy turns exceedingly slowly, if it turns at all?

The Associated Press reported last month that about 3,500 local governments “had obligated less than 25 percent” of their funds. That included 2,600 governments “that reported no projects.”

To make matters worse, much of the money was spent on projects that had little to do with the pandemic. An AP report in 2022 found that local governments directed COVID awards to high-end hotels, sports stadiums, golf course renovations and museums. One Rhode Island town took the cash to remodel its City Hall.

“Some state and local officials,” the AP noted last month, “say the funding has allowed them to undertake long-sought projects they couldn’t otherwise have afforded.”

That’s wonderful, but completely irrelevant. Any money that wasn’t directed to COVID-related purposes was spent illegally. Treasury Department watchdogs take note.

Many congressional Republicans have advocated that the government take back unspent pandemic funds, and a 2023 budget deal allowed precisely that when it came to federal agencies. They need to go further. Congress should also protect taxpayers by ensuring that states and municipalities follow the letter of the law or return unspent money. These governments should also face ramifications for using pandemic relief money on items unconnected to COVID.

Anything less is fiscal malpractice.

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