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States, Providers Hope COVID-19 Relief Wishlist Part Of Possible Omnibus

November 20, 2020

As coronavirus cases top 170,000 a day, states and providers are looking at a potential omnibus spending bill -- or any other vehicle to keep the government funded -- to implement their COVID-19 relief wish lists, which largely consist of more money for providers and cash-strapped states, many of whom want to see the CARES Act spending deadline extended into next year so they can use funds they already have for vaccine distribution.

Stakeholders across the country have been urging Congress and the White House for months to negotiate a fourth stimulus package, and while Senate Majority Leader Mitch McConnell (R-KY) has indicated his interest in passing one before the end of the year, nothing has been announced. Lawmakers are now starting to discuss a 2021 omnibus spending bill, given that the federal government is currently funded only through Dec. 11.

The National Governors Association has not yet taken a position on the yet-to-be-announced spending package but said it's open to any vehicle to provide necessary funds and flexibility for states during the pandemic. The American Health Care Association said it’s open to Congress including additional provider relief and increased federal Medicaid matching funds in a stimulus bill, omnibus or other bill.

President-Elect Joe Biden echoed the NGA’s wishes in his public comments Thursday (Nov. 19) after he met virtually with governors.

“The lost revenue from COVID and the cost of COVID recovery is devastating to state and local budgets as governors -- as all of them indicated,” Biden said. “We’ve got to come together. The federal government has got to deliver this relief sooner rather than later and with flexibilities for the states to meet their needs.”

That aid is especially needed now as states prepare to administer millions of vaccines to their residents, Biden added.

“The governors all acknowledge this will be a massive undertaking -- one of the greatest operational challenges we will face,” he said. “It will take time. It will take coordination. It will take the federal government and state governments working together.”

But time is running out for states to spend their CARES Act money. If states don’t spend all CARES Act funding by Dec. 30, they have to return what’s left over.

Adriane Casalotti, from the National Association of County and City Health Officials, said she’s heard from several communities the Dec. 30 deadline is creating an artificial need to quickly burn the money when they could be responsibly spending it on long-term needs like staff and equipment to properly track a COVID-19 vaccine distribution.

“When you're worried about how you're going to pay for it instead of actually being out there and worried about how do we get these messages up to date so that people can actually follow them and we can make it as safely as possible through the holiday season, it's just an unnecessary effort on their part when we should be supporting them and always in the work that they're doing,” Casalotti said.

She said most of the disagreements between lawmakers that she’s heard so far are around whether to give states more coronavirus relief funds, not whether to extend the CARES Act spending deadline.

“And obviously, from our perspective both are needed,” Casalotti said. “If you appropriate a bunch of money December 31 and you don't extend the deadline on the old money, you're going to have a gap, no matter what, between now and when funds actually get out the door.”

Shelby Kerns, National Association of Budget Officers executive director, said while all states are set to spend their CARES Act funding by Dec. 30, extending the deadline would let states and local governments reprioritize remaining funds as they wait to see if Congress will pass additional relief.

“Given that no further federal aid to help states combat COVID-19 has materialized, it is worrisome that the deadline for use of Coronavirus Relief Funds falls in the midst of an increase in cases,” Kerns said in an email. “Fiscal year 2020 saw the first decline in state revenue since the Great Recession and states have few options other than to cut budgets, even as they face these new demands on spending.” -- Dorothy Mills-Gregg (dmillsgregg@iwpnews.com)