EDITORIAL: Biden extends state, local slush funds
In Iowa, officials used federal COVID money to build a new baseball stadium near the famed “Field of Dreams” diamond. Michigan politicians directed more than $25 million in pandemic cash toward tourism and marketing efforts. In New Mexico, officials spent $16 million in COVID funds to run a lottery for people who got vaccinated.
Joe Biden’s aptly misnamed American Rescue Plan, passed in 2021, dedicated $350 billion for state and local governments to stem budget losses from pandemic business closures and subsequent tax shortfalls. As critics predicted, it became a massive slush fund for government workers and public-sector unions. The waste was unprecedented. In addition to the above examples, a Heritage Foundation review found pandemic money lavished to rehab ski resorts and golf courses and to build tennis and pickleball courts.
Several local governments spent money on raises for their employees. Others were unable to account, as required under the law, for how they spent any of the pandemic money, according to a federal audit.
Scandal or celebration?
To a presidential administration that had the nation’s fiscal interests at heart, this would be a scandal, an embarrassment. To the Biden White House, it’s a cause for celebration.
The American Rescue Plan mandated that governments “obligate” their taxpayer pandemic handouts by the end of 2024 or return the remainder to the Treasury. But under a change announced by stealth in November — it was published with little fanfare in the Federal Register — the Biden administration will extend the deadline for using the funds until the end of 2026. It will do this through linguistic legerdemain, redefining “obligate” to allow more “flexibility” for state and local bureaucrats to avoid sending the loot back to Washington.
The change represents a windfall to those sitting on the greenbacks. Reason magazine reports that a Government Accountability Office audit in October found that states had spent just 45 percent of their allotted funding, while local governments had spent just 35 percent. That means billions of dollars have yet to be directed toward any useful purpose while the pandemic has long since passed. What current public health emergency necessitates this spending today?
The Biden gimmick caught the attention of Republicans, who called the amended rule “quite confounding” and demanded that the Treasury Department rescind the new guideline.
“With our national debt hitting unprecedented levels,” six GOP senators wrote, “the federal government must act as responsible stewards of the taxpayers’ dollars. An extension of COVID-19 era programs is especially perplexing as this administration ended the federal public health emergency for the pandemic on May 11, 2023.”
Has there ever been a president who has exhibited such disdain for the taxpayer? Democrats created the American Rescue Plan as a bank account that high-tax, big-spending states could tap to disguise fiscal mismanagement. At a time when Mr. Biden has opted to make $1.7 trillion annual deficits the new normal for the next decade, the country can’t afford such a luxury, especially when a good chunk of the money is wasted on endeavors that have precious little to do with its supposed purpose.
If Treasury officials ignore the calls from Senate Republicans, legislation should follow in both the upper chamber and the House to end this charade and claw back the unspent funds. If Mr. Biden and Democrats think the country can simply print more money to cover their spending addiction, force them to go on the record so the voters have the last word.
This commentary initially appeared in the Las Vegas Review-Journal.
