Republicans are bracing for ‘aggressive’ oversight of ARPA if they win back the House

For more than a year, House Republicans have complained to the Biden administration about how states and localities are spending Covid-19 relief funds on things like pickleball courts and tourist attractions. But lawmakers say the administration has largely rebuffed their inquiries about whether the money is being used properly.

Now, with a chance to seize control of the House in the November election, top Republicans are vowing to use the authority they would regain to increase scrutiny of the billions of dollars Washington is sending to the state and local levels under the Plan. American Rescue. Act.

“There is going to be aggressive oversight, both from this administration and from states and local municipalities,” Rep. Jason Smith, the top Republican on the House Budget Committee, said in an interview.

Smith said he wants more information on what the White House has been telling states and localities about how they can spend ARPA funds. But he added: “If the state and local municipalities don’t spend it according to law, they will have to pay the money back.”

Rumors about the issue from Republicans underscore how one of the largest injections of federal cash into state and local governments in a generation has turned divisive on Capitol Hill, mounting pressure on state and local officials to show that the money is being spent wisely.

At a minimum, top Republicans on the Budget Committee said route fifty they will drag White House officials like Gene Sperling, a special assistant to President Biden who leads the implementation of ARPA, before them to answer questions they say the administration has dodged.

Lawmakers are even threatening to hold administration officials in contempt of Congress and to withhold funds from the Treasury Department if the officials do not appear to testify at the hearings.

“We’ve seen a staggering amount of waste and abuse of taxpayer money under the American Bailout,” Smith said.

“We need answers. The American people want answers. They deserve answers. And we have been asking for it for a long time,” she added.

Rep. Buddy Carter of Georgia, who could take the helm of the Budget Committee next year, is also, like Smith, floating the idea of ​​taking back some of the billions in ARPA funds that state and local governments still have not spent, or in the future. From the Republican point of view, they have spent poorly—to reduce the cost of an aid package they say was excessive and made inflation worse.

In a game of musical chairs taking place in Congress in the coming months, Smith is seeking to succeed retired Rep. Kevin Brady of Texas as head of the tax-drafting Ways and Means Committee. Meanwhile, Carter is campaigning for the top Republican spot on the budget panel.

“Some of this money that hasn’t been spent, there’s no reason why it should still be available,” Carter said. “We need to bring it back and put it toward debt.”

States could also face additional scrutiny from Ways and Means.

“There is going to be oversight,” Rep. Adrian Smith of Nebraska, who is also running to chair that committee, said in an interview.

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Ways and Means has jurisdiction over unemployment insurance. And a spokeswoman for the Nebraska Republican said she continues to support a proposal to “recover fraudulent COVID relief payments.”

The spokeswoman was referring to a bill sponsored by Brady, and also backed by Jason Smith, that would reverse a Labor Department decision to no longer require states to go after improper unemployment payments.

That bill would require states to return 75% of the money they recover to the federal government. But it would allow them to keep the rest to spend on measures to prevent fraudulent payments in the future.

To be sure, how much Republicans will be able to do depends on whether they can win majorities in both the House and Senate. They would also face the obstacle of Biden’s veto power.

Meanwhile, ARPA spending is providing fodder for Republicans to go after House Democrats running for re-election.

The National Republican Congressional Committee, for example, ran a television ad on September 27 attacking Democratic Rep. Abigail Spanberger of Virginia. “She votes with Nancy Pelosi 100% of the time, voting for trillions of dollars in wasteful spending,” the ad read. “Pet projects like golf courses in Colorado, a ski resort in Iowa, even a luxury hotel in Florida.”

The announcement concerned Colorado Springs, Colo., using more than $6 million in ARPA funds to replace irrigation systems at two golf courses, a project the city says will conserve water. Investments in water and sewer infrastructure are an eligible use under the spending rules of the act.

Pottawattamie County, Iowa, used $2 million of its ARPA funds to purchase a ski slope, according to the Associated Press.

The AP also reported that Broward County, Florida, paid for the construction of a 29-story, 800-room hotel with $140 million in ARPA funds that were allocated to replace lost revenue during the pandemic. However, a county spokesman denied the report to route fifty saying in a statement that the hotel will be financed with county funds and by issuing debt.

ARPA gave states and localities wide flexibility in deciding how to use the aid they received. Advocates of offering support to tourism-related businesses point out that the sector was one of the hardest hit during the pandemic, with travel all but stopping. Similarly, parks and other outdoor recreation facilities saw increased use as people avoided indoor spaces.

State and local governments that have been criticized for ARPA spending say projects like adding more parking lots and bathrooms in Myrtle Beach, South Carolina, will help revive tourism. Municipalities have advocated paying for projects like pickleball courts with ARPA dollars because of provisions that allow them to replace lost revenue.

A joint effort by Brookings Metro, the National Association of Counties and the National League of Cities to track how the 150 largest local governments are spending ARPA dollars found earlier this year that the largest sums—$4.3 billion for cities and $1.5 billion for counties—were going to government operations. Much of that money recovered revenue losses attributed to Covid.

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A report from the left-leaning Center on Budget and Policy Priorities said states have used significant portions of ARPA funds on human services and economic development.

However, Jason Smith believes the administration should do more to limit spending to areas related to fighting the pandemic.

“We know that the statute establishes different uses of the funds. And, I’ll tell you right now, $140 million for a luxury hotel in Florida is not an appropriate use. It’s also not worth $2 million worth of trees in New York. Or pickleball courts in Michigan. Or $5 million for an illegal alcohol trial in North Carolina.”

Carter agreed. “One of our main objectives in the next session, when we are in the majority, will be oversight,” he said in an interview. He added that pandemic aid oversight “is going to be at the top of our list.”

Republicans say letters to the administration asking about ARPA spending have gone unanswered. For example, Jason Smith, in May of last year, asked Sperling what happened to ARPA funds allocated to county governments that don’t exist. He said that he got no response.

The question referred to a Tax Foundation report that Hartford County, Connecticut, was in line to receive $173 million in ARPA funding. However, there are no county governments in the state. The Treasury Department did not respond to an inquiry from route fifty. But David Sinko Steuber, chief of staff to the mayor of Hartford, said ARPA funds allocated to the state’s “counties” were instead distributed to municipalities.

Smith also asked Sperling questions about his role, such as: “Who do you report directly to in the White House?” In addition, he pressed Sperling on whether he would commit to testifying before Congress and how often he would provide detailed reports on ARPA spending.

Other letters Republicans have sent to the administration have raised questions about topics like what is being done to prevent fraudsters from stealing unemployment insurance and small business aid.

Spokespeople for the White House and the Treasury Department did not respond when asked if they had responded to inquiries from Republicans or questions about how they are evaluating state and local ARPA spending.

Carter, in the interview, promised to use “the power of the stock market” to pressure the Treasury Department to respond to Republican concerns about ARPA.

“They’re going to answer if I’m the budget chairman,” Carter said. And if they don’t, “we’ll hold your money until they do.”

Jason Smith said lawmakers would hold Biden administration officials in contempt of Congress if they did not agree to appear for the hearings.

We’ve asked about Gene Sperling. we have asked [Treasury Secretary Janet Yellen] come before our committees,” he said. “They refuse to do it, but I bet when we’re in the majority, they’ll be before the House Ways and Means Committee. I can tell you that for sure.

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