States and local governments will have significant leeway in deciding how to spend the $350 billion in Covid-19 relief funds, according to the Treasury Department.
by Thomas Franck
CNBC.com
States and local governments will have significant leeway in deciding how to spend the $350 billion in Covid-19 relief funds authorized by President Joe Biden’s American Rescue Plan.
The Treasury Department said Monday that governments will be compelled to spend the cash infusion “to meet pandemic response needs and rebuild a strong, more equitable economy.”
But importantly, Treasury officials said states and territories are not allowed to use the funding to offset lost revenue as the result of a tax cut or make a deposit to a pension fund.
Senior administration officials said on Monday that approved uses for the funds are intentionally broad and flexible.