Why we are Covid broke

A closed restaurant for rent during the first year of the Covid-19 pandemic in Venice, California on August 10, 2020.


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Christian Monterrosa/Shutterstock

Dysfunction in Washington is so pervasive that it’s sometimes difficult to know where to begin. So it’s useful in a recent White House letter to Congress – which neatly summarizes in a few short pages the dishonesty and wrongdoing of today’s Beltway.

“Dear Madam Speaker,” begins the March 15 letter dedicated to the issue of Covid poverty. “We are informing you of the following actions required by the lack of critical funding.” Office of Management and Budget Director Shalanda Young and White House Covid Coordinator Jeffrey Zients explain that the federal government is not will no longer be able to “secure adequate booster doses” if Congress fails to allocate tens of billions more in taxpayer dollars, “monoclonal antibody treatment purchases” will be halted, “critical testing” will be halted, and “preventive treatments for immunocompromised individuals” will be scaled back.

We’re kind of broke. How? Under the call of “emergency,” didn’t Washington spend $6.6 trillion in fiscal 2020 and another $6.8 trillion in 2021? Both years corresponded to at least 50% more spending than 2019 – and all for “Covid”. Just a year ago, Democrats waved through a sixth Covid relief bill, President Biden’s massive $1.9 trillion American rescue plan – enough money to buy every Covid vaccine, ventilator and chain of hospitals on the planet. Just this week, the White House unveiled a $5.8 trillion budget proposal for 2023. Yet the government insists that we are now facing the Covid apocalypse again without $22.5 billion in emergency dollars.

Where has all the money gone? Anywhere except for Covid. The rescue plan handed over $350 billion in “aid money” to states, and the Associated Press recently described its use. About $140 million will go to a high-end hotel in Broward County, Florida. Colorado Springs, Colorado is investing $6.6 million in golf course irrigation systems. A county in Iowa uses $2 million to buy a privately owned ski resort. Massachusetts commits $5 million to cover Edward M. Kennedy Institute debt to US Senate.

Crain reports even dollars earmarked for Covid are not safe. New York is sitting on funds that should be used to help homeowners and recover small businesses but may not be needed if the pandemic subsides. Crain notes that “a watchdog has expressed the idea that the relief funds — specifically $12.7 billion in American Rescue Plan Act funds — could become a pile of unallocated dollars for the state government to use as it sees fit “.

And that’s just that legal Waste, Fraud and Abuse. One of the first Covid relief acts in Congress created a committee of inspectors general to oversee Covid funds. It has done a good job – even if Congress studiously ignores its findings. The Small Business Administration’s inspector general reported that fraud at the Paycheck Protection Program and other loans was “outrageous — unprecedented.” “In terms of monetary value, the amount of fraud in these Covid relief programs will be greater than any previous government program,” he told ABC News in August.

The Labor Department’s inspector general now estimates that more than $163 billion of $872 billion in Covid unemployment benefits may have been improperly paid, “with a significant portion as a result of fraud”. That’s a 19% improper payment rate and more than seven times the $22.5 billion the White House recently insisted it needs extra Covid dollars in an emergency.

Democratic “moderates” have expressed outrage at this mismanagement, with Virginia Rep. Abigail Spanberger calling the state jerks “outrageous” and “insane.” But the rescue plan cast an entirely partisan vote (including Ms. Spanberger’s), and those Democrats were nowhere to be found when Republicans tried to limit how the money was being used. Even now, many Democrats are resisting Republican demands that additional money come from misappropriated, unspent Covid funds.

Not that Republicans have much to brag about. They boycotted the latest $1.9 trillion bailout, but they were accomplices in the five previous Covid bills. Those bills included hefty checks to households who didn’t need the cash, bailouts for blue states, and huge new cash injections for federal agencies.

Americans are increasingly realizing that there is little Congress can do except spend money — and only via shady backroom deals and last-minute votes. In recent years, it has proved unable to pass police reform, trade laws, or much-needed immigration policy changes, to name a few failures. But dangle in front of lawmakers a juicy infrastructure blast, or a earmark-filled omnibus, or a payout to states and the education lobby masquerading as a Covid “bailout” bill – and they’re all over it.

The mismanagement of Covid funds underscores the absurdity of the White House’s new call for more, let alone Mr Biden’s $5.8 trillion budget. If Republicans can’t put spending discipline at the heart of their midterm message, they risk alienating an electoral base disgusted by Washington’s largesse.

Write to kim@wsj.com.

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https://www.wsj.com/articles/kimberley-strassel-covid-broke-emergency-spending-pandemic-relief-american-rescue-plan-washington-budget-negotiations-boosters-testing-waste-fraud-11648735209 Why we are Covid broke

Ethan Gach

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