U.S. Sen. Martha McSally (R-AZ) joined more than a dozen Republican colleagues in requesting new guidance from the U.S. Treasury Department that provides flexibility and reduces red tape for states using their emergency stimulus funds.
Sen. McSally and 15 other senators encouraged U.S. Treasury Secretary Steven Mnuchin to publish guidance for implementing the Coronavirus Relief Fund, section 601 of the newly signed Coronavirus Aid, Relief, and Economic Security (CARES) Act, which gives states flexibility in supporting local governments and first responders. The Coronavirus Relief Fund provides each state a minimum of $1.25 billion in funding to address the impacts of the COVID-19 pandemic.
“Treasury must not create an unnecessary complex burden of compliance that hinders states working with local governments — especially very small communities,” wrote Sen. McSally and her colleagues in an April 7 letter sent to Mnuchin. “An overly narrow definition will create unintended consequences that stymy response at the local level by tying up critical resources needed by state and local governments. This would be a disaster, run counter to the needs of the emergency Congress recognized in passing the CARES Act, and have devastating results across the country.”
Among the members joining Sen. McSally in signing the letter were U.S. Sens. Steve Daines (R-MT), Pat Roberts (R-KS), Shelley Moore Capito (R-WV), Deb Fischer (R-NE), John Hoeven (R-ND), Thom Tillis (R-NC), Jerry Moran (R-KS), and Roger Wicker (R-MS).
Of particular concern to the senators is the definition of local government in the Coronavirus Relief Fund, which cites it as a unit of government below the state level whose population exceeds 500,000. “Even in the largest states, many of the counties, municipalities and their equivalents do not have populations that exceed 500,000,” Sen. McSally and the senators wrote.
The lawmakers noted that in previous discussions with Mnuchin, they understood that the CARES Act limited which local governments could seek direct payments from the Treasury Department in order to simplify distribution and that when Treasury issued forthcoming guidance implementing the program, the department would not interpret the section to limit a state from subsequently assisting county or municipal governments, according to their letter.
“Those concerns were again elevated, however, because of your recent comments that Treasury will issue guidance that unintentionally creates obstacles to states supporting their front line,” the senators wrote. “It is critical to the success of the Coronavirus Relief Fund that Treasury considers direct emergency payments from states to units of local government in their state as eligible expenditures for the purposes of this section.”
Sen. McSally and her colleagues requested that the Treasury Department ensure that emergency supplemental state support for smaller communities is explicitly authorized in any guidance it issues.