WASHINGTON—The Biden administration is warning that it might have to scrap critical Covid-19 programs, a potential blow to its efforts to combat the pandemic, unless Congress moves quickly to approve funding left out of the $1.5 trillion omnibus spending package.
The administration initially floated a $30 billion request, which it then formally cut to $22.5 billion, only to be reduced further to $15.6 billion by congressional negotiators. With Republicans insisting that no new money be allocated until previous funding rounds were exhausted, rank-and-file Democrats then balked at a proposal to reuse unspent funds intended for state governments, prompting party leaders to pull the provision altogether.
Democratic leaders now plan to hold a stand-alone vote in the House this coming week on $15.6 billion in Covid-19 aid, without paying for it by clawing back state funds. Such an approach would likely hit a wall in the 50-50 Senate, where Democrats would need at least 10 Republican votes to advance the proposal.
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“What the president was asking for in the legislation was a good start,” said House Speaker Nancy Pelosi (D., Calif.) at the Democrats’ retreat in Philadelphia on Friday. “It wasn’t everything. So we would have to do more anyway.”
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The administration says it needs money soon to lock in orders for treatments and vaccines. While Covid-19 cases have plummeted since a surge earlier this year and jurisdictions nationwide are ending pandemic-related restrictions, officials say the nation must be prepared for further outbreaks.
For instance, the administration has said it needed funds to place orders now for the purchase of antivirals to treat Covid-19—especially as other countries vie for limited supplies—to prevent a shortfall this autumn. Domestic manufacturing of tests and laboratory capacity could be cut back by more than half without more funding, officials say.
The lack of additional Covid-19 funding also means it can’t be determined whether the U.S. will have the quantity of shots it would need for a possible booster campaign in the fall, officials said, or have adequate vaccine supply for children under 5 years old.
‘What the president was asking for in the legislation was a good start,’ House Speaker Nancy Pelosi said this week at the Democratic retreat in Philadelphia.
PHOTO: JIM WATSON/AGENCE FRANCE-PRESSE/GETTY IMAGES
As of mid-February, no money was left in the Department of Health and Human Services’ public-health and social-services emergency fund for healthcare providers, according to documents that the department shared with Congress and were viewed by The Wall Street Journal.
“As we have said, failing to take action and secure urgent Covid-response funding now will have near-term consequences for the American people and leave us more vulnerable to a new variant,” said White House spokesman Kevin Munoz.
Republicans aren’t convinced, saying the administration shouldn’t ask Congress to approve more money while states are sitting on unspent federal Covid-19 relief funds. As of the end of January, the Treasury had about $105 billion in unobligated state and local funds and $10 billion in an unobligated coronavirus capital-projects fund.
“Does the White House agree that states that are already flush with cash should be prioritized over spending more money on vaccines for kids and therapeutics?” asked a spokesman for Senate Minority Leader Mitch McConnell (R., Ky.).
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Still, some see a way forward.
“I’m for doing something,” said Sen. Roy Blunt (R., Mo.), who sits on the Senate appropriations committee. “Those accounts are out of money, and if you see a need for somebody continuing to produce vaccines, therapeutics and tests, you’re probably going to have some federal money to put in.”
The White House plans to underscore publicly the urgency of securing more Covid-19 aid in the coming week, in the hopes of escalating pressure on lawmakers. One White House official said the administration was looking at other potential funding vehicles for attaching the money should the House stand-alone proposal fail to pass the Senate.
The Covid-19 funding to states was provided through the American Rescue Plan, a $1.9 trillion economic stimulus package passed in 2021. The funding was initially split in a way that states would get half in fiscal year 2021 and half in fiscal year 2022. The Treasury Department retained discretion to allocate more funding as needed, so some states were able to get all the money at once.
The White House reached out to governors’ offices about a week ago, a senior aide to one governor’s office said, to get bipartisan support for its Covid-19 funding request, then set at $22.5 billion. There wasn’t enough support across the entire National Governors Association to get governors to endorse it as a group.
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In completing the omnibus package, bipartisan negotiators reached a deal for new Covid-19 funding, paid for by some of the unspent state funds. The deal fell apart after some governors and lawmakers were angered by Congress’s approach as some states had factored the unspent money into their 2022 budgets.
The senior state aide said many governors were caught off guard by the clawback provision, which would only affect states that hadn’t spent all their federal funds. Lawmakers said they were blindsided as well.
“My job is to fight for the people of Michigan. If New York and California should get their money, so should we,” said Rep. Debbie Dingell (D., Mich.), who said the move could also undercut Democratic colleagues in tough races. “Forget me, think about some of these front-liners who were going to lose their money.”
On Wednesday, after several hours of protests by rank-and-file Democrats, the House leadership decided to pull the coronavirus money out of the bill completely.
House Majority Leader Steny Hoyer (D., Md.) played down the divisions to reporters at the party’s retreat in Philadelphia, saying that while the focus was on the coronavirus aid blowup, everything else went smoothly in passing the funding bill.
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“Oh, we didn’t get 1,000% of what they proposed. So we got, you know, 990% of what we proposed. We’re a very united party,” he said.
