U.S. senators from Virginia and Maryland have joined more than 40 other lawmakers in urging the Trump administration to lift restrictions on federal emergency funds so states can address soaring budget shortfalls.
The Democratic senators have written a letter to Treasury Secretary Steven Mnuchin, requesting that he revise guidelines for $150 billion that was approved in the original CARES Act to address the COVID-19 pandemic.
In a release with the letter from Sen. Jack Reed, D-R.I., the senators urge that the administration remove “needless restrictions” that “could cripple each state’s ability to respond and recover.”
The lawmakers also argue that failing to alter the restrictions could lead to layoffs of employees on the front lines of the response to the coronavirus.
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Sen. Tim Kaine, D-Va., said in a recent conference call with reporters that the restrictions potentially limit how states can deal with mounting financial liabilities. Virginia, like many states, is required by law to have a balanced budget.
“If you don’t allow them to backstop those losses, they only have one choice, and usually that’s laying off people,” Kaine said, noting that could mean the loss of first responders.
In their letter, the senators said that guidance for use of federal funds issued by the U.S. Treasury included “limiting language not found in the law.”
“Governors and senators from both sides of the aisle have set aside ideology and urged you to follow the law as written instead of creating more bureaucratic red tape in the middle of a public health emergency and ensuing economic crisis,” the letter states. “Of all the regulations that this administration seeks to cut, it should start with this one.”
Virginia has received half of the $3.3 billion it is slated to get under the CARES Act that was approved in March. But the money may not be used to deal with the state’s mounting budget shortfall.
“Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not otherwise qualify under the statute,” U.S. Treasury guidelines state.
The Virginia General Assembly last week agreed to suspend more than $2 billion in spending it had earlier approved.
Maryland Gov. Larry Hogan, who heads the National Governors Association, is urging that Congress approve at least $500 billion for state and local governments in the next major legislation lawmakers take up.
Congressional Democrats and Republicans are on a political collision course over what should be included in the next major legislation.
Senate Majority Leader Mitch McConnell has raised concerns about the nearly $3 trillion already approved by Congress and its impact on the national debt. He has urged that more time be allowed to let the money work its way into the economy.
McConnell also announced Monday that Senators plan to return to Washington on May 4.
“The Senate must focus on concrete steps to strengthen our response to this complex crisis,” he said. “We cannot get distracted by preexisting partisan wish lists or calls to paper over decades of reckless decisions that had nothing to do with COVID-19.”
The letter sent to Mnuchin by the 46 Democratic senators, in addition to being signed by Kaine, was signed by Sen. Mark Warner, D-Va., and Maryland Sens. Ben Cardin and Chris Van Hollen.
