Parsippany, NJ -- Representative Mikie Sherrill (NJ-11) and Representative Peter King (NY-02) today co-led 29 Members of Congress in a bipartisan letter urging United States Department of the Treasury Secretary Steven Mnuchin to amend Treasury guidance which unfairly limits states’ ability to respond effectively to the spread of COVID-19.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law by the President on March 27, 2020, created a $150 billion Coronavirus Relief Fund for state and local governments. In official guidance issued by the Treasury Department on April 22, Secretary Mnuchin barred states from disbursing these funds to shore up state budget shortfalls associated with the spread of COVID-19.

 

“States that have acted quickly to protect their residents from the spread of COVID-19 by immediately implementing programs funded by the CARES Act should be held up as an example, not penalized for their foresight,” the Members wrote.

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The letter, co-led by Representative Sherrill and Representative Peter King (NY-02), was also signed by: Representatives Joe Neguse (CO-02), Mike Doyle (PA-18), Alexandria Ocasio-Cortez (NY-14), Sheila Jackson Lee (TX-18), Ed Case (HI-01), Ed Perlmutter (CO-07), David Scott (GA-13), Tom Malinowski (NJ-07), Joe Courtney (CT-02), Jim Himes (CT-04), Doris Matsui (CA-06), Brian Higgins (NY-26), Peter Welch (VT-AL), Suzanne Bonamici (OR-01), Bill Foster (IL-11), Xochitl Torres Small (NM-02), Bonnie Watson Coleman (NJ-12), Suzan DelBene (WA-01), Harley Rouda (CA-48), Lisa Blunt Rochester (DE-AL), Daniel T. Kildee (MI-05), Bobby L. Rush (IL-01), Val B. Demings (FL-10), TJ Cox (CA-21), Adam Smith (WA-09), Frederica S. Wilson (FL-24) and Lee Zeldin (NY-01).

The full text of the letter can be found below:

May 1, 2020

The Honorable Steven Mnuchin
United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

Dear Secretary Mnuchin:

We write to express our deep concerns regarding the guidance issued by the United States Department of the Treasury on April 22, 2020, as it relates to the types of approved usage of stabilization funds authorized by the CARES Act.

Congress made its intentions clear when it passed legislation to provide $150 billion to State, Territorial, Local, and Tribal Governments that these funds were to be made available to meet the individual needs of those governments. As you know, the CARES Act stipulates that expenditures by subnational governments are authorized if they:

  • Are necessary expenditures incurred due to the COVID-19 pandemic;
  • Were not accounted for in the budget most recently approved as of enactment of the CARES Act (March 27, 2020); and
  • Are incurred between March and December of 2020.

The intent of this program is to provide states with the flexibility to address the crisis as it best suits their needs. However, the recent guidance from your department establishes strict and unnecessary limits on what states can and cannot do. Of greatest concern, the guidance establishes a prohibition on expenditures to address budget shortfalls associated with COVID-19. States need to be able to replenish the accounts that were borrowed from when they adjusted existing budgets to fund COVID-19 response efforts. Without revisions, this guidance will almost certainly lead to many states being unable to spend the money they were provided, and instead compelled to return it to federal coffers. This is both unacceptable and preventable; you have the authority to let states use these funds as intended, instead of forcing them to make drastic, damaging, and unnecessary budget cuts.

States that have acted quickly to protect their residents from the spread of COVID-19 by immediately implementing programs funded by the CARES Act should be held up as an example, not penalized for their foresight. In the strongest possible terms, we urge you to amend this overly prescriptive guidance and allow states to use funds authorized by Congress as originally intended; to address key needs while maintaining essential services.

Sincerely,