Budget Blog

May 3, 2022 - Washington Report

By Leah Wavrunek posted 05-03-2022 03:54 PM

  

This Week on the Hill  

The House is out this week while the Senate is in, focusing on administration nominations and motions to instruct related to the conference committee established for H.R. 4521, the U.S. Innovation and Competes Act of 2021. The Senate Environment and Public Works Committee will hold a markup of the Water Resources Development Act of 2022 (WRDA 2022) on Wednesday; a section-by-section can be found here and summary here.

The Federal Reserve’s Federal Open Market Committee also meets this week, with most observers expecting the committee to announce an increase in the benchmark interest rate.

 

Treasury Updates FAQs for the State and Local Fiscal Recovery Fund and Capital Projects Fund

Last week the Treasury Department updated its frequently asked questions (FAQs) for two programs authorized by the American Rescue Plan Act (ARPA). First, Treasury released final rule FAQs for the Coronavirus State and Local Fiscal Recovery Fund (SLFRF); the final rule was effective on April 1, 2022. A table on page 2 outlines the FAQs that are new or substantially updated; answers to frequently asked questions that are unique to the interim final rule remain available here. Second, Treasury updated the FAQs for the Capital Projects Fund (CPF), adding nine questions as outlined on the first page of the document and denoted with “[4/28]”.

 

Treasury Announces SSBCI Technical Assistance Funding

On Thursday the Treasury Department announced plans to deploy $300 million of State Small Business Credit Initiative (SSBCI) Technical Assistance funding to support small businesses. Of the total, $200 million will be provided to states, territories, the District of Columbia and Tribal governments that are participating in the SSBCI capital program to provide technical assistance to qualifying underserved entrepreneurs and very small businesses. Another $100 million will be transferred to the Minority Business Development Agency at the Department of Commerce, which will focus its technical assistance on helping underserved entrepreneurs seeking direct capital investment. Treasury also released the Technical Assistance Grant Program Guidelines and a Preliminary Technical Assistance Grant Program Allocation Table. Applications for SSBCI technical assistance funding from states, the District of Columbia, and territories are due by June 30.

 

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).

  • DOL Awards Additional $20 Million in Equity Grant Funding to State UI Systems: The Department of Labor announced the award of more than $20 million in ARPA equity grant funding to state unemployment insurance (UI) systems in Indiana, Kentucky, Utah, and Washington. This is the third round of funding to date.
  • FCC Opens Third Filing Window for the Emergency Connectivity Fund: The Federal Communications Commission (FCC) announced the opening of the third application filing window to award at least $1 billion in Emergency Connectivity Fund support to close the homework gap. From April 28 to May 13, eligible schools and libraries can submit requests for funding to purchase eligible equipment and services between July 1 and December 31, 2022. According to the commission, given past demand, the third application filing window will likely be the last opportunity to request funding before program funds are exhausted.
  • Treasury Releases March Data for Emergency Rental Assistance Program: The Treasury Department released the March report for the Emergency Rental Assistance (ERA) program, along with a report on 2021 ERA1 demographic percentages by state.
  • FEMA Releases Updated Funeral Assistance Data by State and Territory: The Federal Emergency Management Agency (FEMA) has provided more than $2.3 billion to over 351,000 people to assist with COVID-19-related funeral costs for deaths occurring on or after January 20, 2020. The press release includes state and territory data on number of applications, amount approved, and number of awards as of May 2.
  • ACF Releases Responses to Questions from LIHWAP National Stakeholders Meeting: The Administration for Children and Families (ACF) posted responses to questions from the Low Income Household Water Assistance Program (LIHWAP) National Stakeholders Meeting held on Mach 30.
  • FNS Approves P-EBT Programs for School Year 2021-2022: The Food and Nutrition Service (FNS) approved additional states to operate a Pandemic Electronic Benefit Transfer (P-EBT) program during school year 2021-2022: Alabama and Maryland. To date, a total of 27 states/territories have been approved.
  • Education Announces Support for Student Academic and Mental Health Recovery: The Department of Education announced major actions and investments from government, the private sector, and nonprofit organizations to support student academic and mental health recovery. This includes highlighting how ARPA has funded efforts to date and how philanthropic partners are investing additional resources to stretch ARPA resources, while the department leverages over $160 million in grant funding.
  • CRS Releases Report on UI Program Integrity and Fraud Concerns During the Pandemic: The Congressional Research Service (CRS) released a report examining program integrity and fraud concerns in unemployment insurance (UI) during the pandemic that also synthesizes existing policy options to address UI program integrity issues including information technology modernization, data matching, and identity verification.
  • Education Posts Form to Voluntarily Decline ARPA HEERF Funds: The Department of Education published a form that may be completed by an institution that would like to decline all or a portion of its ARPA formula grant awards under the Higher Education Emergency Relief Fund (HEERF) grant funds. Institutions that have not received HEERF grant funds should not complete this form. Completed forms must be emailed to the department by September 30, 2024.
  • Treasury Posts SLFRF Housing Investments Fact Sheet: The Treasury Department published a fact sheet on how state, local and Tribal governments are using State and Local Fiscal Recovery Funds (SLFRF) to make housing investments. The fact sheet highlights state examples of utilizing funds for categories such as rental and mortgage assistance, utility assistance, and affordable housing.

 

Administration Actions Related to COVID-19

  • FEMA Posts Presentation on COVID-19 Public Assistance Progress and Next Steps: The Federal Emergency Management Agency (FEMA) posted the presentation from an informational webinar on COVID-19 Public Assistance progress, success and next steps. The presentation covers topics such as deadlines, guidance, and resources.
  • FNS Posts Webinar Recording on Transitioning to Normal Child Nutrition Operations: The Food and Nutrition Service (FNS) posted a recording of a webinar held on transitioning back to normal child nutrition operations for state agencies. The webinar covered topics including waiver authority, summer 2022 operational waivers, school year 2022-23 operational and administrative waivers, and policy issues.
  • Moderna Seeks FDA Authorization for Vaccine for Children Under Age 6: Moderna, Inc. announced it has submitted a request for emergency use authorization (EUA) to the Food and Drug Administration (FDA) for its COVID-19 vaccine in children 6 months to under 2 years and 2 years to under 6 years of age. Per the release, positive interim results from the Phase 2/3 study showed a robust neutralizing antibody response after a two-dose primary series of the vaccine, along with a favorable safety profile. Moderna is also currently studying booster doses for all pediatric cohorts.
  • Pfizer and BioNTech Seeks FDA Authorization for Vaccine Booster Dose for Children Aged 5-11: Pfizer Inc. and BioNTech SE submitted an application to the Food and Drug Administration (FDA) for emergency use authorization (EUA) of a booster dose of their COVID-19 vaccine for children 5-11 years of age. Per the press release, data from the Phase 2/3 clinical trial demonstrated a strong immune response in this age group following a booster dose with no new safety signals.
  • FDA Sets June Dates for Consideration of Vaccines for Young Children: The Food and Drug Administration (FDA) announced tentative plans to hold meetings of its Vaccines and Related Biological Products Advisory Committee (VRBPAC) in anticipation of complete submissions of emergency use authorization (EUA) requests announced by vaccine manufacturers. The dates include June 8, 21, and 22 to discuss updates to the Moderna and Pfizer-BioNTech EUAs for their COVID-19 vaccines to include younger populations.
  • Administration Releases Fact Sheet on Urgent Need for Additional COVID-19 Response Funding: The administration released a fact sheet outlining the need for additional COVID-19 response funds, highlighting consequences such as fewer vaccines, fewer treatments, and fewer tests.
  • Administration Unveils Steps to Increase Access to COVID-19 Treatments: The administration released a fact sheet outlining new actions to make COVID-19 treatments easier to access and increase patient and provider awareness. This includes nearly doubling the number of places oral antivirals are available in the coming weeks, launching a new effort to stand up federally-supported Test-to-Treat sites, supporting medical providers, and communicating with the public. A listing of treatment thresholds, orders and replenishment by jurisdiction can be found here.

 

IIJA Implementation Resources Released

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

  • The Department of Energy announced $3.1 billion in funding to increase domestic production of batteries and components, bolster domestic supply chains, create jobs and help lower costs. The department also announced a separate $60 million to support second-life applications for batteries once used to power EVs and new processes for recycling materials back into the battery supply chain.
  • The Department of Energy (DOE) released a request for information seeking public input on the structure of an approximately $2.3 billion formula grant program over five years to strengthen and modernize the nation’s power grid. The new program, established by the IIJA, will assist states and Tribal nations with projects that create jobs to deliver clean, affordable and reliable energy. Comments must be received by May 27. Additional information, including a draft allocation of funds, can be found here.
  • The Department of Transportation (DOT) announced the availability of approximately $1.47 billion in competitive grant funds to help modernize bus fleets and facilities, the first Federal Transit Administration (FTA) competitive grant opportunity under the IIJA. The funding is available under the Low or No Emission (Low-No) Grant Program and Grants for Buses and Bus Facilities Program; applications are due by May 31.
  • The Federal Aviation Administration (FAA) began investing the first $1 billion of $5 billion into the country’s air traffic control system. The funding will be used for projects such as weather and tracking equipment, power systems, enroute flight centers, replacing towers, and facility security.
  • The Bureau of Reclamation announced a funding opportunity for the fiscal year 2023 WaterSMART Water and Energy Efficiency Grants to allocate IIJA funding and fiscal year 2023 appropriations. In 2022, Reclamation is making $160 million available for WaterSMART grants and will release additional funding opportunities in the coming months. Applications are due by July 28.
  • The Office of Management and Budget (OMB) issued initial guidance to federal agencies that have responsibilities for implementing IIJA programs. The guidance addresses topics including agency coordination, coordination with oversight entities, performance planning, reducing administrative burden, and managing risk in program design. A fact sheet can be found here.
  • The Department of Transportation (DOT) issued a Notice of Proposed Temporary Waiver of Buy America Requirements for Construction under the IIJA. In order to deliver projects and meaningful results while ensuring robust adoption of Buy America standards, DOT is proposing to establish a temporary public interest waiver for construction materials for a period expiring 180 days after May 14, 2022 and seeks comment. DOT proposes this transitional waiver to prepare for compliance with the new Made in America standards for construction materials. During this time period DOT expects states, industry, and other partners to begin the compliance process. Comments are due by May 13.
  • The Federal Transit Administration (FTA) issued a notice in the Federal Register that announces changes in FTA programs in accordance with amendments to federal public transportation law by the IIJA and provides preliminary implementation instructions and guidance for the new and revised programs in fiscal year 2022. The notice also announces the funding apportionment for programs authorized and funded with fiscal year 2022 contract authority and appropriations and describes future plans for several competitive programs.

 

President Asks Congress for $33 Billion in Ukraine Aid, Includes Funds for Domestic Crop Production

On Thursday the President sent a request to House Speaker Nancy Pelosi (D-CA) for $33.0 billion in fiscal year 2022 emergency supplemental funding for security and economic assistance to Ukraine. The request includes $20.4 billion in additional security and military assistance, $8.5 billion in additional economic assistance, and $3 billion in additional humanitarian assistance. The supplemental funding would also include $500 million in domestic food production assistance to support the production of U.S. food crops that are experiencing a global shortage due to the war in Ukraine, including wheat and soybeans. The request to the Speaker also urges Congress to “act promptly to provide the $22.5 billion (in COVID-19 aid) I requested on March 2, 2022.”

 

ACF Expands Head Start Categorical Eligibility

The Administration for Children and Families (ACF) recently sent an information memorandum to all Head Start and Early Head Start agencies and delegate agencies. For the purposes of Head Start eligibility determination, the Office of Head Start (OHS) will expand its interpretation of “public assistance,” as used in the Head Start statute, to include the Supplemental Nutrition Assistance Program (SNAP). Upon issuance, this information memorandum adds SNAP to public assistance to determine recipients as categorically eligible for Head Start programs. Note that this approach does not guarantee a SNAP recipient enrollment in a Head Start program; programs must adhere to their recruitment and selection criteria to ensure they prioritize enrollment for those who may benefit most from Head Start services.

 

DHS Posts Information Collection on REAL ID Compliance

The Department of Homeland Security (DHS) recently issued a notice of information collection activities relating to REAL ID. To assist in program administration and enforcement planning efforts, DHS is requesting data from states describing the total number of driver’s license/identification card holders in the state, the total number of REAL ID compliant licenses and identification cards issued by the state, and the total number of noncompliant licenses and identification cards issued by the state. The collection of the information will support the information needs of DHS in its efforts to determine state compliance with requirements for issuing REAL ID driver’s licenses and identification cards. Comments on this information collection may be submitted until June 21. On May 3, 2023, U.S. travelers must be REAL ID compliant to board domestic flights and access certain federal facilities.

 

FDA Proposes Ban on Menthol Cigarettes and Flavored Cigars

Last Thursday the Food and Drug Administration (FDA) announced proposed product standards to prohibit menthol as a characterizing flavor in cigarettes and prohibit all characterizing flavors (other than tobacco) in cigars. The intent of the proposed menthol product standard is to reduce the appeal of cigarettes and improve the health and reduce the mortality risk of current menthol cigarette smokers. Beginning May 4, 2022, the public can provide comments on these proposed rules, which the FDA will review as it considers future action. FDA is seeking comment on, among other things, how it can best make clear the respective roles of the agency and state and local law enforcement, as well as policy considerations related to the potential racial and social justice implications of the proposed product standards. Comments are due by July 5. A fact sheet can be found here.

 

Administration Launches Expanded Second Chance Opportunities

Last week the administration outlined a series of actions to expand second chance opportunities for formerly incarcerated persons. The actions cross multiple agencies including: launching a partnership between the Departments of Justice and Labor to invest $145 million to provide job skills training and employment/reentry plans for people incarcerated in federal facilities; providing new workforce grant funding at the Department of Labor; expanding access to business capital through the Small Business Administration; conducting outreach to incarcerated veterans through the Department of Veterans Affairs; expanding access to health care through the Department of Health and Human Services; and expanding access to housing through the Department of Housing and Urban Development. The Department of Education also announced it has invited 73 additional schools to expand its Second Chance Pell Initiative, which provides Pell Grants to incarcerated individuals to participate in postsecondary education programs. A report on expanding employment opportunities was also released.

 

EPA Issues Waiver for Summer Sales of E15 Fuel

On Friday the Environmental Protection Agency (EPA) issued an emergency fuel waiver to allow E15 gasoline – gasoline that uses a 15 percent ethanol blend – to be sold during the summer driving season. This action helps implement the President’s prior announcement on addressing increases in the price of gas. EPA’s emergency fuel waiver will go into effect on May 1 when terminal operators would otherwise no longer be able to sell E15 in the effected regions of the country and will last for the statutory maximum of 20 days, and new waivers are expected.

 

DOE Clarifies Modifications to Program Year 2022 State Energy Program Requirements

The Department of Energy (DOE) recently provided updated instructions regarding the preparation of program year 2022 State Energy Program (SEP) funding applications and provided revised allocations for states and territories. Program modifications include that the Infrastructure Investment and Jobs Act (IIJA) eliminated the previous cost match requirement; accordingly, states are not required to contribute matching funds to receive their program year 2022 allocation. Further, states do not need to submit a letter committing to submit a State Energy Security Plan to DOE to receive their fiscal year 2022 award.  

 

EPA Announces Three PFAS Commitments

Last Thursday the Environmental Protection Agency (EPA) announced three water commitments under the agency’s PFAS Strategic Roadmap. First, the agency published a new method that can broadly screen for the presence of PFAS in water at the part per billion level. Second, EPA issued a memo that provides instructions for monitoring provisions, analytical methods, the use of pollution prevention, and best management practices to address discharges of PFAS using existing National Pollutant Discharge Elimination System (NPDES) authorities. Lastly, the agency is developing national recommended ambient water quality criteria for PFAS to protect aquatic life, which may be used by states and Tribes.

 

For Your Information

DOI Announces Funding for Wetland Conservation, State Wildlife Grants

The Department of the Interior (DOI) announced grant awards under multiple programs. First, the department announced $95 million in funding was approved by the Migratory Bird Conservation Commission to help conserve or restore more than 300,000 acres of wetland and associated upland habitats for waterfowl and other birds. Project summaries can be found here. Second, the department announced a distribution of $56 million to state wildlife agencies through the State Wildlife Grant Program to support natural resource stewardship efforts and to conserve imperiled wildlife and their habitats. The apportionment table for states and territories can be found here.

 

DOL Announces Funding for YouthBuild Grants, Rural Communities

The Department of Labor (DOL) made two funding announcements. First, the department announced the award of $90.4 million in YouthBuild grants to prepare young adults not enrolled in school or in the labor market for jobs in construction and other in-demand industries through apprenticeship and other career pathways. The department awarded 68 grants to organizations in 28 states and Puerto Rico. Second, DOL announced the availability of $34.2 million in funding in Workforce Opportunity for Rural Communities Initiative demonstration grants to assist workers in obtaining new opportunities in rural communities where residents once relied on energy industry jobs. Applications are due by July 8.

 

DOE Announces $45 Million to Develop More Efficient EV Batteries

The Department of Energy (DOE) announced up to $45 million in funding to support the domestic development of advanced batteries for electric vehicles (EVs). The department is launching the Electric Vehicles for American Low-Carbon Living (EVs4ALL) program to develop more affordable, convenient, efficient, and resilient batteries. Concept paper submissions are due by June 16.

 

HHS Announces $25 Million to Expand Access to School-Based Health Services

The Department of Health and Human Services (HHS) awarded nearly $25 million to improve and strengthen access to school-based health services. Awards were made to 125 health centers that deliver comprehensive, high-quality primary health care services to individuals and families through school-based sites in underserved communities. A list of recipients is included in the press release.

 

DOL Updates WOTC Initial Funding Allotments for Fiscal Year 2022

The Department of Labor (DOL) released Training and Employment Guidance Letter No. 03-21, Change 2 on Work Opportunity Tax Credit (WOTC) initial funding allotments for fiscal year 2022. The change conveys the remaining balance for fiscal year 2022 funding allotments and explains application requirements for State Workforce Agencies based on appropriated funding. The letter also announces 18 states selected to receive additional backlog award funding.

 

USDA Opens Grant Application for Improving SNAP Customer Service

The U.S. Department of Agriculture’s (USDA) Food and Nutrition Service announced $5 million in competitive grants to enhance efficiency and access in the Supplemental Nutrition Assistance Program (SNAP) through process and technology improvements. Eligible entities include state and local agencies that administer SNAP and state or local governments. Applications are due by June 27, with funding announced in the fall.

 

Recently Released Reports

Forensic Analysis of Pension Funding: A Tool for Policymakers

Center for Retirement Research at Boston College

The State of Preschool Yearbook 2021

National Institute for Early Education Research

Using Data to Advance Digital Skills: A State Playbook

National Governors Association

 

Economic News

Unemployment Claims Reported for Week Ending April 23

The U.S. Department of Labor released unemployment insurance weekly claims data last Thursday that showed for the week ending April 23, the advance figure for seasonally adjusted initial claims was 180,000. This is a decrease of 5,000 from the previous week’s revised level, which was revised up by 1,000 from 184,000 to 185,000. The 4-week moving average was 179,750, an increase of 2,250 from the previous week's revised average of 177,500. The advance seasonally adjusted insured unemployment rate was 1.0 percent for the week ending April 16, unchanged from the previous week’s unrevised rate. The advance number of actual initial claims under state programs, unadjusted, totaled 202,983 in the week ending April 23, an increase of 5,005 (or 2.5 percent) from the previous week.

 

GDP Decreased 1.4 Percent in the First Quarter of 2022

Last week the U.S. Department of Commerce Bureau of Economic Analysis released data on the real gross domestic product (GDP) for the first quarter of 2022 (advance estimate), showing a decrease at an annual rate of 1.4 percent. In the fourth quarter, real GDP increased 6.9 percent. Real gross domestic product is the value of goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes. The decrease in real GDP in the first quarter reflected decreases in private inventory investment, exports, federal government spending, and state and local government spending, while imports increased. Personal consumption expenditures, nonresidential fixed investment, and residential fixed investment increased. The “second” estimate for the first quarter, based on more complete data, will be released on May 26.

 

Compensation Costs Increased 4.5 Percent in 12-Month Period Ending in March

New data from the Bureau of Labor Statistics (BLS) shows that compensation costs for civilian workers increased 4.5 percent for the 12-month period ending in March 2022. Wages and salaries increased 4.7 percent and benefit costs increased 4.1 percent over the year. Compensation costs for state and local government workers increased 3.2 percent for the 12-month period ending in March 2022; wages and salaries increased 3.1 percent and benefit costs increased 3.5 percent.