Wyden, Merkley urge feds to ease restrictions on how states use virus relief funds

WASHINGTON (KTVZ) -- Sens. Ron Wyden and Jeff Merkley, D-Ore., called on the Trump Administration Monday to revise what they called needless bureaucratic restrictions on how governors can distribute COVID-19 relief funds to their states.

Wyden, Merkley and 44 other Democratic senators said in their letter to Treasury Secretary Steven Mnuchin those needed revisions would allow governors to provide essential public services to their states, as clearly intended by the bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act.

“In the midst of an economic collapse, the intent of the entire CARES Act is to provide flexible help to a wide range of Americans,” the senators wrote. “To prevent the flexible use of these relief funds is a choice that is neither required nor intended by law.”

The CARES Act included a $150 billion Coronavirus Relief Fund for states to help provide a measure of certainty and economic stability, relieving pressure on state budgets and ensuring states can maintain public services. States and local governments may use the relief funds to help with urgent needs and cope with the public health and economic impact of COVID-19.  Under the law, states may use the federal funding for costs related to the COVID-19 public health emergency incurred between March 1 and December 30, 2020.  

But when the Treasury Department issued its initial Coronavirus Relief Fund guidance for State, Territorial, Local, and Tribal Governments, it included limiting language not found in the law. If the Trump Administration insists on imposing its overly restrictive interpretation, it could severely limit states’ abilities to respond and recover, forcing states and communities to cut public services, and lead to layoffs of public employees on the front lines of COVID-19 response.

Gov. Kate Brown late last week was sharply critical of new Treasury Department rules that prohibit the use of CARES Act funds for state revenue shortfalls. "Without this flexibility, cuts to vital state services during this public health crisis will result,” Brown said.

In their letter to Mnuchin, the senators urged the Trump Administration: “to follow the law as written instead of creating more bureaucratic red tape in the middle of a public health emergency and ensuing economic crisis.  Of all the regulations that this Administration seeks to cut, it should start with this one.”

A copy of the letter is here.