Biden announces launch of $350B in emergency recovery funding

WASHINGTON (NewsNation Now) — President Joe Biden Monday announced the launch of more than $350 billion in state and local fiscal recovery funds established by his sweeping $1.9 trillion COVID-19 pandemic rescue package.

“Coronavirus State and Local Fiscal Recovery Funds provide eligible state, local, territorial, and Tribal
governments with a substantial infusion of resources to meet pandemic response needs and rebuild a
stronger, more equitable economy as the country recovers,” the White House said in a fact sheet. “Within the categories of eligible uses, recipients have broad flexibility to decide how best to use this funding to meet the needs of their communities.”

Administration officials said payments could begin to go out in the coming days to eligible governments, allowing state, local, territorial and tribal officials to offset the economic damage from the coronavirus pandemic.

Guidance from the Treasury Department listed broad categories for spending the money. State and local governments can use the money for public health expenses. They can also offset harm from the downturn to workers, small businesses and affected industries. Money can replace lost public sector revenues. Essential workers can qualify for premium pay, and investments can be made in water, sewer and broadband internet.

But Treasury has also placed restrictions. Officials said the funds should not be used by state and local governments to cut taxes, pay down debt or bolster reserve funds.

Biden Monday denied reports that Americans are choosing to not return to work and choosing to stay at home and collect unemployment benefits.

“We’re going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits,” Biden said.

Biden’s announcement comes as COVID-19 cases decline and states and localities ease restrictions with businesses adding jobs for four straight months, according to the Labor Department. Still, the unemployment rate ticked up to 6.1% from 6% in March.

Biden addressed the disappointing jobs report last week saying, “we knew this wouldn’t be a sprint, it would be a marathon.”

The jobs report, the first since the White House’s $1.9 trillion COVID-19 pandemic rescue package was approved in March, will probably do little to change expectations that the economy entered the second quarter with strong momentum and was on track for its best performance this year in almost four decades.

Biden defended his sweeping COVID-19 pandemic rescue package and said that this was just the first step in a big economic recovery.

“Some critics said we didn’t need the American Rescue Plan — that this economy would just heal itself,” Biden said. “Today’s report just underscores, in my view, how vital the actions we’re taking are…we’re still digging out of an economic collapse.”

Biden plans to spend another $4 trillion on education and childcare, middle- and low-income families, infrastructure and jobs. The Federal Reserve has signaled it intends to leave its benchmark interest rate near zero and continue to pump money into the economy.

Republican lawmakers in Congress so far have balked at the price tag of both the families plan and infrastructure package. Republicans last month unveiled a public works proposal with a much smaller price tag and a narrower definition of infrastructure than Biden’s. The price of the Republican proposal came in at $568 billion over five years, compared to the $2.3 trillion that Biden has called for spending over eight years.