May 23, 2023 - Health

Dems think twice about clawing back COVID-19 funds for debt limit

Illustration: Aïda Amer/Axios

Congressional Democrats are having second thoughts about taking back unspent coronavirus funds as part of a debt limit deal, concerned that doing so could have serious consequences for myriad public health initiatives.

Why it matters: The COVID-19 relief funds were supposed to be the low-hanging fruit in any debt ceiling compromise and have been overshadowed by more contentious issues like spending caps and Medicaid work requirements.

But House Appropriations Ranking Member Rosa DeLauro (D-Conn.) recently released a list of the programs and initiatives that would be affected if the funds were rescinded. Among them:

  • Health, mental health and public safety services for Native American tribal communities
  • Rural health care systems and animal COVID-19 surveillance programs
  • FDA and HHS funding for work on vaccines and therapeutics on future coronavirus variants
  • Provider relief fund for safety-net and rural hospitals and nursing homes
  • Medical supplies in the Strategic National Stockpile
  • Veterans Affairs health care services funding

What they're saying: "They want to take everything back," DeLauro told Axios. That may be possible, she said, in cases where "we're done with something, but you've got to be discerning, you've got to take a look at the whole thing rather than a blanket statement."

  • "Quite frankly, I don't even think that they know what is in all of that. They just said, 'Oh yeah, rescission and be done,'" DeLauro added. "That's a discussion for appropriations. Let's deal with it in Appropriations. It does not have to be a discussion connected with the debt ceiling."
  • Senate Appropriations Chair Patty Murray (D-Wash.) told Axios the funds are "obviously something that we can talk about, but a lot of it has already been contracted."

Don't forget: Plans to rescind billions of dollars of unspent pandemic relief caused a major flap for Democrats last spring as they tried to pass a funding package for the pandemic response.

Yes, but: Other Democrats — including Rep. Steny Hoyer (D-Md.), who serves on Appropriations — are more willing to compromise on this point.

  • "We appropriated a lot of money, and if we have funds that are not obligated and are not used, it's a reasonable request," Hoyer told Axios.
  • House Speaker Kevin McCarthy's office didn't respond to a request for comment.

Reality check: Despite Democrats' concerns, President Biden has signaled an openness to rescinding COVID-19 funds, making it a likelier target than other GOP priorities like Medicaid work requirements.

What we're watching: Would clawing back unobligated COVID-19 funds actually make much of a dent in the federal deficit?

Our thought bubble: Compared with the country's current $925 billion deficit, unspent COVID-19 funds are a pretty small piece of the puzzle.

A version of this story was published first on Axios Pro. Get news like this by subscribing. Use code POLICY100 which gives you $100 off.

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