Budget Blog

March 15, 2022 - Washington Report

By Leah Wavrunek posted 03-15-2022 04:17 PM

  

This Week on the Hill  

The House and Senate are in session this week. The House will consider 12 bills and may consider a standalone bill for COVID-19 aid (see story below). The Senate resumes consideration of Shalanda Young to be director of the Office of Management and Budget. The Senate Environment and Public Works Committee will hold an oversight hearing Wednesday on the Clean Water State Revolving Loan Fund.

The Federal Reserve’s Federal Open Market Committee begins a two-day meeting today and is widely expected to raise interest rates. Currently, the target range for the federal funds rate is 0 to .25 percent.

 

Treasury Releases ERA Round 2 Reallocation Information

Yesterday the Treasury Department released the reallocation amounts for the Emergency Rental Assistance (ERA) program, or ERA1. The information includes Round 2 Reallocation amounts and Voluntary Reallocation amounts. ERA1 reallocation guidance can be found here.

 

Treasury Releases Webinar on NEU Reporting

Last week the Treasury Department posted a new reporting webinar for the State and Local Fiscal Recovery Funds (SLFRF) program. The new webinar is an introduction to non-entitlement unit (NEU) reporting, covering topics such as account creation, roles, and agreements/supporting documents submission. Other reporting and compliance resources can be found here.  

 

Congress Approves, President Signs Fiscal Year 2022 Spending Bill

Last week Congress approved a fiscal year 2022 omnibus spending bill that funds the federal government through September 30, 2022; it also includes $13.6 billion to support Ukraine. The bill (H.R. 2471) provides $1.5 trillion in discretionary resources across the 12 appropriations bills; this includes $730 billion in non-defense discretionary spending (a 6.7 percent increase over the prior year) and $782 billion in defense spending (an increase of 5.6 percent). A summary of the 12 appropriations bills can be found here. Summaries and one-pagers on individual sections can be found here. To ensure sufficient time to enroll the final package, the President signed into law a short-term continuing resolution through March 15 while the omnibus is prepared for signing; the President then signed the bill this afternoon. Omnibus provisions of note include: reauthorizes the Violence Against Women Act (VAWA); increases and extends the federal medical assistance percentage (FMAP) for certain territories through December 13; provides an additional $200 million to Puerto Rico’s Medicaid program contingent on Puerto Rico establishing a reimbursement floor for providers; and includes Community Project Funding for the House and Congressionally-Directed Spending for the Senate. Federal Funds Information for States’ Jim Martin table, updated to reflect the omnibus package, can be found here.

The $15.6 billion in additional COVID-19 pandemic aid originally included in the omnibus package was removed from the final bill. The House may vote for all or a part of that funding this week, following removal of the rescission of unallocated Coronavirus State and Local Fiscal Relief Funds as a $7.055 billion offset. The standalone bill was reintroduced as H.R. 7007. Today the White House released a fact sheet on actions the administration would be taking, including no longer accepting new claims for testing and treatment in the Uninsured Program as of March 22, reducing state allocations of monoclonal antibody treatments by more than 30 percent starting next week, and scaling back or canceling additional orders of response supplies.

 

Administration Releases Fact Sheets Marking One-Year Anniversary of ARPA

Last week marked the one year anniversary of the American Rescue Plan Act (ARPA) being signed into law. In highlighting impacts of the law, the Treasury Department released information on programs authorized by ARPA, including a fact sheet on the impact of ARPA after one year and project highlights from the State and Local Fiscal Recovery Funds. Also, the White House released a fact sheet showing state-by-state analysis of ARPA tax credits for families and workers and a fact sheet on ARPA support for schools and students.

 

COVID-19 Relief Implementation

The following guidance and information was recently released to implement provisions in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (Division M of H.R. 133, the Consolidated Appropriations Act, 2021), and the American Rescue Plan Act of 2021 (ARPA).

  • HUD Allocates $69.9 Million to Tribal Communities: The Department of Housing and Urban Development (HUD) announced the award of $69.9 million in Indian Community Development Block Grant-American Rescue Plan (ICDBG-ARP) grants to 49 Tribal communities to prevent, prepare for, and respond to the pandemic. With this fourth round of funding, HUD has awarded nearly $280 million in ICDBG-ARP grants across 240 Tribes. A list of fourth round recipients can be found here.
  • HHS Announces Nearly $35 Million Available to Expand Mental Health Support: The Department of Health and Human Services (HHS) announced nearly $35 million in funding opportunities to strengthen and expand community mental health services and suicide prevention programs for children and young adults. Of the total, $9.2 million is derived from ARPA and seven grant programs comprise the available funding.
  • USDA Announces Technical Assistance to Benefit Underserved Producers: The U.S. Department of Agriculture (USDA) announced it is accepting applications for the ARPA Technical Assistance Investment Program to provide historically underserved farmers, ranchers, and forest landowners technical support in accessing department programs and services. The program will receive a minimum of $25 million, with awards ranging from $500,000 to $3.5 million for a five-year cooperative agreement. The application deadline is June 1.
  • FNS Provides List of Active SNAP COVID Waivers by State: The Food and Nutrition Service (FNS) updated its list of active Supplemental Nutrition Assistance Program (SNAP) COVID waivers by state. The list includes implementation date and expiration date, which for many is March 31, 2022.
  • Treasury Releases Monthly ERA Spending through January: The Treasury Department released monthly Emergency Rental Assistance (ERA) spending data through January 31. Cumulative ERA1 expenditures as of January 31, 2022 total $17.1 billion while cumulative ERA2 expenditures total $5.5 billion.
  • HUD Releases Reallocation Guidance for Emergency Housing Vouchers: The Department of Housing and Urban Development (HUD) released guidance explaining the process for reallocating Emergency Housing Voucher (EHV) awards that are voluntarily returned to HUD. ARPA appropriated $5 billion for new incremental EHVs, the renewal of those EHVs, and fees for administration.
  • FNS Approves P-EBT Programs for School Year 2021-2022: The Food and Nutrition Service (FNS) approved additional states and territories to operate a Pandemic Electronic Benefit Transfer (P-EBT) program during school year 2021-2022: Florida, Guam, and Puerto Rico. To date, a total of 21 states/territories have been approved.
  • Treasury OIG Releases Information on CRF Risk Analytics Dashboard Procedures: The Treasury Department Office of Inspector General (OIG) released the Coronavirus Relief Fund (CRF) Risk Analytics Dashboard Procedures. The procedures are intended to aid Treasury OIG in analyzing reporting deficiencies, data anomalies, and unallowable uses of CRF payments from the GrantSolutions portal. It will also be used to select higher risk prime recipients and related subrecipients for audit or desk review.
  • DOJ Names Director for COVID-19 Fraud Enforcement: The Department of Justice (DOJ) announced the appointment of Associate Deputy Attorney General Kevin Chambers to serve as Director for COVID-19 Fraud Enforcement, who plans to focus on large-scale criminal enterprises and foreign actors. The department also announced the latest results of criminal and civil enforcement actions that include alleged fraud related to over $8 billion in pandemic relief.

 

Administration Actions Related to COVID-19

  • TSA Extends Transportation Mask Mandate for One Month: Per recommendations from the Centers for Disease Control and Prevention (CDC), the Transportation Security Administration (TSA) will extend the security directive for mask use on public transportation and transportation hubs for one month, through April 18. According to CDC’s statement, CDC will work with government agencies to help inform a revised policy framework for when, and under what circumstances, masks should be required in the public transportation corridor.
  • OSHA Launches Initiative to Protect Health Care Workers: The Occupational Safety and Health Administration (OSHA) announced an enforcement memorandum for a short-term increase in highly focused inspections directed at hospitals and skilled nursing care facilities that treat or handle COVID-19 patients. The goal is to ensure continued mitigation to control the spread of COVID-19 and future variants, and protect the health and safety of health care workers at heightened risk for contracting the virus. The expanded presence will take place from March 9 to June 9, 2022.
  • Treasury Announces Plan to End Pandemic Inventory Backlog: The Treasury Department outlined a plan to end the pandemic backlog this year, including hiring 10,000 new employees, creating a new surge team to process new returns, paying overtime to thousands of employees, and supporting additional contractor options. The agency also plans to increase taxpayer assistance to ensure accurate returns and reduce processing delays. The Internal Revenue Service (IRS) launched voice and chat bots on two of its specialized toll-free telephone assistance lines and irs.gov, enabling quick assistance for simple payment or collection notice questions.
  • CRS Reports Highlight Federal Response to COVID-19: The Congressional Research Service (CRS) released two reports examining the federal response to the COVID-19 pandemic. These reports look at nutrition assistance programs at the U.S. Department of Agriculture and the role of the Federal Emergency Management Agency (FEMA).
  • CMS Releases COVID-19 Snapshot: The Centers for Medicare and Medicaid Services (CMS) released an update to the Medicaid and Children’s Health Insurance Program (CHIP) COVID-19 data snapshot, which includes data through August 31, 2021. The snapshot shows that over 117 million Americans were enrolled across Medicaid or CHIP for at least one day during the Public Health Emergency (PHE) period; about 40 percent were children and 9 percent were over the age of 65.
  • OIG Issues Alert on Reporting Fraud in the Lost Wages Assistance Program: The Department of Homeland Security Office of Inspector General (OIG) released a management alert on reporting suspected fraud of Lost Wages Assistance (LWA). As of November 2021, the department obligated more than $38 billion in grants to 54 state workforce agencies, which have until September 27, 2022 to close out their LWA grants. The OIG found that 38 state workforce agencies did not include plans for reporting suspected or identified LWA fraud; further, it was found that the FEMA template originally given to the workforce agencies did not include the reporting requirement, which was added later. The alert includes recommendations and actions taken to address the issue.
  • FNS Publishes Survey Results on Supply Chain Disruption: The Food and Nutrition Service (FNS) released the results of a school food authority survey on supply chain disruption. About 92 percent of school food authorities reported experiencing challenges due to supply chain disruptions, with challenges including limited product availability, missing or substituted items, and labor shortages. Respondents expect these and other issues to last into school year 2022-23.
  • FDA Authorizes Extension of Shelf Life for Janssen COVID-19 Vaccine: The Food and Drug Administration (FDA) authorized an extension for the shelf life of the refrigerated Janssen COVID-19 vaccine, from six to nine months, allowing the product to be stored at 2-8 degrees Celsius.

 

IIJA Implementation Resources Released

Federal agencies continue to release implementation resources pertaining to the Infrastructure Investment and Jobs Act (IIJA).

  • The Environmental Protection Agency (EPA) released a memorandum outlining a strategy for collaborative implementation with state, local and Tribal partners of $43 billion in water infrastructure funding through the IIJA. The implementation memo highlights the flexibility provided to states and borrowers to address a wide variety of local water quality and public health challenges. A fact sheet can be found here. EPA will also host a webinar on March 16 to discuss the implementation memorandum; register here.
  • The Federal Transit Administration (FTA) issued a notice of availability of initial guidance proposals for the Capital Investment Grants (CIG) program. The notice invites public comment on initial guidance proposals to implement changes made to the CIG program by the IIJA. Comments are due by April 14.
  • The Department of the Interior (DOI) released frequently asked questions from the Bureau of Reclamation on the infrastructure law and authorities.
  • The Congressional Research Service (CRS) released an issue brief examining provisions in the IIJA addressing surface transportation and climate change.

 

Senate Passes Postal Service Reform Bill, Sends to President

On Tuesday the Senate voted 79-19 to approve H.R. 3076, the Postal Service Reform Act of 2022, and send the legislation to the President’s desk. The bill repeals the requirement that the U.S. Postal Service (USPS) annually prepay future retirement health benefits, allows the USPS to establish a program to enter into agreements with an agency of any state, local or Tribal government to provide certain nonpostal products and services, requires the USPS to develop and maintain a public dashboard to track service performance, and requires future postal retirees to enroll in Medicare. The administration previously released a statement indicating support for the bill. A summary of the legislation can be found here.

 

Census Bureau Releases First 2020 Census Quality Reports

On Thursday the U.S. Census Bureau released results from two analyses about the quality of the 2020 Census counts. The two analyses are from the Post-Enumeration Survey (PES) and Demographic Analysis Estimates (DA) and estimate how well the 2020 Census counted everyone in the nation and in certain demographic groups. The results show that the 2020 Census undercounted the Black or African American population, the American Indian or Alaska Native population living on a reservation, the Hispanic or Latino population, and people who reported being of Some Other Race, while overcounting the Non-Hispanic White population and the Asian population. Among age groups, the 2020 Census undercounted children 0 to 17 years old, particularly young children 0 to 4 years old. The PES found that the 2020 Census had neither an undercount nor an overcount for the nation; it estimated a net coverage error of -0.24 percent (or 782,000 people) with a standard error of 0.25 percent for the nation, which was not statistically different from zero.

 

DOL Announces Proposed Rulemaking to Update Davis-Bacon Act

Last week the Department of Labor (DOL) announced a Notice of Proposed Rulemaking to consider updating the regulations that implement the Davis-Bacon Act and related acts to speed up prevailing wage updates, create several efficiencies in the current system and ensure prevailing wage rates keep up with actual wages. Per the announcement, there are 71 Davis-Bacon related acts applicable to federal and federally-assisted construction projects that require the payment of locally prevailing wage rates for 1.2 million construction workers and this would be the first comprehensive regulatory review in nearly 40 years. Comments on the proposed rule are due 60 days after publication in the Federal Register.

 

VA Releases Infrastructure Report to Begin AIR Process

On Monday the Department of Veterans Affairs (VA) released its Asset and Infrastructure Review (AIR) report, as required by the VA MISSION Act (P.L. 115-182). The VA MISSION Act requires VA Secretary McDonough to publish the AIR report in the Federal Register and submit it to Congress and a presidentially appointed AIR Commission; the commission will then conduct public hearings as part of its review. The report’s release marks the beginning of an in-depth process intended to help the VA build a health care network with the right facilities, in the right places, to provide the right care for all veterans, including underserved and at-risk veteran populations in every part of the country. The report includes recommendations and justifications for facility changes, including closing some facilities while modernizing or constructing others.

 

EPA Proposes New Interstate Air Pollution Rule

On Friday the Environmental Protection Agency (EPA) released a proposed rule under the “Good Neighbor” provision of the Clean Air Act to reduce air pollution in several states that travels downwind to neighboring states. Under the proposed rule, 26 states would be covered by the requirements to reduce pollution that significantly contributes to problems attaining and maintaining the 2015 Ozone National Ambient Air Quality Standards (NAAQS) in downwind states. The rule would establish an allowance-based ozone season trading program with nitrogen oxides (NOX) emissions budgets for fossil fuel-fired power plants in 25 states and would also establish NOX emissions limitations for certain other industrial stationary sources in 23 states. Additional resources, including a map of affected states, can be found here.

 

EPA Publishes State-Level Greenhouse Gas Emission Data, Resources

Last week the Environmental Protection Agency (EPA) released new and updated resources to support states as they work to address the climate crisis and reduce pollution. The resources include new state-level data on greenhouse gas emissions and sinks, updates to EPA’s existing State Inventory Tool to help states compile their own emission and sink estimates, and information on state-level opportunities to reduce emissions of highly-potent greenhouse gases. EPA will also continue providing technical assistance to help states develop inventories of greenhouse gas emissions and execute strategies that reduce those emissions.

 

ACF Issues Guidance on LIHEAP Performance Data for Fiscal Year 2021

Yesterday the Administration for Children and Families (ACF) sent an action transmittal to Low Income Home Energy Assistance Program (LIHEAP) state grant recipients, including the District of Columbia. The purpose of the action transmittal is to advise LIHEAP grant recipients that the deadline for submitting the LIHEAP Performance Data Form for fiscal year 2021 is March 31; the guidance contains instructions, a data form template, and information on changes made to the data form for fiscal year 2021.

 

GSA to Hold Final Webinar on Transition to the Unique Entity ID

The General Services Administration recently announced registration for the final webinar on transition to the Unique Entity ID (SAM), scheduled for March 23 at 1pm EST. By April 4, the federal government will transition from using the DUNS Number to using the new SAM as the entity identifier for federal awards. The webinar will highlight what the change to the new identifier means for work in Integrated Award Environment (IAE) systems. Register here.

 

For Your Information

FTA Awards $409.3 Million to Modernize and Electrify Buses, Improve Safety

The Federal Transit Administration (FTA) awarded $409.3 million in grants to 70 projects in 39 states to modernize and electrify buses, make bus systems and routes more reliable, and improve their safety. FTA received more than $2.5 billion in funding requests covering 303 project proposals. A list of funded projects can be found here.

 

USDA Announces $250 Million to Support Domestic Fertilizer Production

The U.S. Department of Agriculture announced it will make $250 million available through a new grant program this summer to support additional fertilizer production for American farmers to address rising costs. USDA will use funds from the Commodity Credit Corporation (CCC), set aside in September for market disruptions, to develop a grant program that provides ‘gap’ financing to bring new, independent domestic production capacity on-line. Details on the application process will be announced this summer, with the first awards expected before the end of 2022. Additionally, USDA will launch a public inquiry seeking information regarding seeds and agricultural inputs, fertilizer, and retail markets.

 

DOL Announces $85 Million to Support Underserved Youth

The Department of Labor (DOL) announced an $85 million funding opportunity to support programs that prepare and empower justice-involved youth and young adults with skills training, employment services, educational support, and mentorship. The grants focus on youth and young adults impacted by community violence. The program will award approximately 29 grants ranging from $1.5 million to $4 million each through two competitive rounds. Applications are due April 21.

 

USDA Announces $35 Million to Support Underserved and Veteran Farmers and Ranchers

The U.S. Department of Agriculture (USDA) announced approximately $35 million in available funding to community-based and nonprofit organizations, institutions of higher education, and Tribal entities that help historically underserved and veteran farmers and ranchers own and operate successful farms through the 2501 Program. Since 2010, the 2501 Program has awarded 563 grants totaling more than $158 million. Applications are due June 8.

 

HHS Announces $25.6 Million to Combat Opioid Use Disorder

The Department of Health and Human Services (HHS) announced two grant programs totaling $25.6 million that will expand access to medication-assisted treatment for opioid use disorder and prevent the misuse of prescription drugs. The funds are available under the Strategic Prevention Framework for Prescription Drugs grant program ($3 million) and Medication-Assisted Treatment – Prescription Drug and Opioid grant program ($22.6 million).

 

DOL Announces $10 Million for Out-of-School Time Organizations

The Department of Labor (DOL) announced $10 million in available grant funding intended to expand local work readiness programs and support workforce development activities. The funds will support efforts to connect out-of-school time organizations with state and local workforce partners. The department will award approximately five grants of up to $2.5 million each and applications are due April 25.

 

ACF Posts Guidance, Tentative Allocations for Fiscal Year 2022 Children’s Justice Act Grants

The Administration for Children and Families (ACF) released a program instruction for fiscal year 2022 Children’s Justice Act grants to states under the Child Abuse Prevention and Treatment Act (CAPTA). The program instruction provides guidance on the eligibility requirements and the grant application procedures, and also contains a tentative state and territory allocation table, totaling $17 million.

 

Joint Committee on Taxation Releases “Bluebook” on Recent Tax Legislation

The Joint Committee on Taxation prepared its “Bluebook” for the 116th Congress. The Bluebook provides explanations of more than 200 tax provisions across eight different bills. For each provision, the Bluebook includes a description of present law, an explanation of the provision, and the effective date. An appendix provides a table with estimated budget effects.

 

Recently Released Reports

Potential Impacts of a Federal Gasoline Tax Moratorium

Congressional Research Service

How States Can Manage Midyear Budget Gaps

The Pew Charitable Trusts

Continued Impact of COVID-19 on Public Sector Employee Job and Financial Outlook, Satisfaction, and Retention

MissionSquare Research Institute

 

Economic News

Unemployment Claims Reported for Week Ending March 5

The U.S. Department of Labor released unemployment insurance weekly claims data last Thursday that showed for the week ending March 5, the advance figure for seasonally adjusted initial claims was 227,000. This is an increase of 11,000 from the previous week’s revised level, which was revised up by 1,000 from 215,000 to 216,000. The 4-week moving average was 231,250, an increase of 500 from the previous week's revised average of 230,750. The advance seasonally adjusted insured unemployment rate was 1.1 percent for the week ending February 26, unchanged from the previous week’s unrevised rate. The advance number of actual initial claims under state programs, unadjusted, totaled 218,072 in the week ending March 5, an increase of 22,025 (or 11.2 percent) from the previous week.

 

Consumer Price Index Increased in February as Real Hourly Earnings Declined

The U.S. Bureau of Labor Statistics released new data on the Consumer Price Index for All Urban Consumers (CPI-U) for February, showing the CPI-U increased 0.8 percent on a seasonally adjusted basis after rising 0.6 percent in January. Over the last twelve months, the all items index increased 7.9 percent before seasonal adjustment. The index for all items less food and energy rose 0.5 percent in February, while the gasoline index rose 6.6 percent and the food index rose 1.0 percent. For the 12-months ending in February, the index for all items less food and energy rose 6.4 percent, the largest 12-month change since the period ending August 1982. Meanwhile, real average hourly earnings for all employees decreased 0.8 percent from January to February, seasonally adjusted. This result stems from essentially no change in average hourly earnings combined with an increase of 0.8 percent in the CPI-U.

 

Job Openings Little Changed at 11.3 Million in January

The number of job openings was little changed at 11.3 million on the last business day of January, according to data recently released by the U.S. Department of Labor. Job openings decreased in several industries including accommodation and food services (-288,000), transportation, warehousing and utilities (-132,000), and federal government (-60,000) but increased in other services (+136,000) and durable goods manufacturing (+85,000). The number of hires was little changed at 6.5 million and the hires rate was unchanged at 4.3 percent. The number of separations was little changed at 6.1 million. The 4.3 million quits reported in January were down slightly (-151,000); many economists closely watch the number of quits as a measure of employee confidence in finding another job. Finally, layoffs and discharges were little changed at 1.4 million. Over the 12 months ending in January, hires totaled 76.4 million and separations totaled 70.0 million, yielding a net employment gain of 6.4 million.