Budget Blog

August 9, 2022 - Washington Report

By Leah Wavrunek posted 08-09-2022 04:21 PM

  

This Week on the Hill  

The House and Senate are not in session for the remainder of the month, but the House is expected to return on Friday to vote on the reconciliation bill (see story below).

 

Senate Advances Reconciliation Bill, House Action Expected Friday

On Sunday the Senate voted 51-50 to advance H.R. 5376, the Inflation Reduction Act of 2022, using the reconciliation process that only requires a simple majority for passage. The bill includes funding to address climate and health care along with tax changes that will increase revenues. Some of the provisions include: tax credits for clean energy production and additional energy sources; tax credits for residential clean energy expenses and purchases of electric vehicles; funds for communities that face high pollution burdens; funds to address drought; allows Medicare to negotiate prices for some drugs and includes measures to cap drug costs in Medicare, including capping patients’ insulin costs at $35 per month; extends premium assistance for the Affordable Care Act for three years; and allocates new funds to boost enforcement at the Internal Revenue Service. The House is currently scheduled to return on Friday to vote on the bill.

 

Guidance Released on ARPA Funds for Affordable Housing, SLFRF and ERA FAQs Updated

On July 27 the Treasury Department announced new guidance to increase the ability of state, local and Tribal governments to use American Rescue Plan Act (ARPA) funds to boost the supply of affordable housing in their communities. This included increasing flexibility to use State and Local Fiscal Recovery Funds (SLFRF) to fund long-term affordable housing loans and expanding presumptively eligible uses; the updated frequently asked questions can be found here (see page 2 for changes). Treasury also published a “How-To” Guide to help governments combine ARPA funds with other sources of federal funding. The department also updated the FAQs for the Emergency Rental Assistance Program (see question 46) on the use of ERA2 funds for affordable rental housing, eviction prevention, and housing stability purposes after October 1, 2022. In the updates to the frequently asked questions for the SLFRF, other non-housing questions were also updated or added (changes noted on page 2).

 

Treasury Updates Homeowner Assistance Fund Guidance

On Monday the Treasury Department updated the guidance for the Homeowner Assistance Fund (HAF) to provide additional guidance on the reimbursement of certain qualified expenses. A compilation of program changes made to date can be found here.

 

Treasury Launches Website, Resources for Local Assistance and Tribal Consistency Fund

The Treasury Department recently launched a website for the Local Assistance and Tribal Consistency Fund, which was appropriated $2 billion in the American Rescue Plan Act (ARPA) across fiscal years 2022 and 2023 to provide payments to eligible revenue sharing counties and Tribal governments for use on any governmental purpose except for lobbying. The department also released program guidance along with an allocation methodology and consultation summary for Tribal governments.

 

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).

  • Commerce Announces 32 Winners for $500 Million in Workforce Grants: The Department of Commerce announced grant awards to 32 industry-led workforce training partnerships as part of the $500 million Good Jobs Challenge funded by ARPA. The program will enable communities to invest in innovative approaches to workforce development that is projected to secure job opportunities for more than 50,000 Americans. A fact sheet can be found here.
  • HHS Awards Nearly $88.6 Million for Data Collection and Reporting: The Department of Health and Human Services (HHS) announced $88.6 million in ARPA funding to nearly 1,400 community health centers to advance health equity through better data collection and reporting. A map of recipients can be found here.
  • HHS Invests Nearly $60 Million for Health Care in Rural Areas: The Department of Health and Human Services (HHS) announced nearly $60 million to grow the health workforce and increase access to quality care in rural communities, including nearly $46 million in ARPA funding. A list of recipients can be found here.
  • DOL Awards $20.5 Million to Three States for UI Services: The Department of Labor (DOL) announced the award of $20.5 million in grant funding to Arizona, Colorado and North Carolina to improve the delivery of unemployment insurance (UI) services to people facing obstacles to access. The department is making $260 million, received under ARPA, available to promote equitable access to UI benefits and to date has announced awards totaling $107 million to 20 states and the District of Columbia.
  • Education Provides Guidance to States on Maintenance of Effort Calculation: On July 22, the Department of Education sent a “Dear Colleague” letter to states advising them they can use standard rounding rules to demonstrate compliance with the Maintenance of Effort (MOE) requirements for the Education Stabilization Fund in both the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA) and ARPA. Specifically, the letter states, "When comparing the FY 2022 and FY 2023 proportional levels by which a State must maintain effort to the baseline years, the State, at its discretion, may round the difference to the nearest whole number using standard rounding procedures."
  • Treasury Launches SSBCI TA Grant Program Portal, Extends Deadlines: The Treasury Department launched the 2021 State Small Business Credit Initiative (SSBCI) Technical Assistance Grant Application Portal on August 1; application materials can be found here. Email instructions and a link were emailed to eligible jurisdiction point(s) of contact the same day as the launch. Further, the department announced the Technical Assistance Grant Program application deadline for states, the District of Columbia and territories was extended to October 14.
  • CMS Releases Chart on Unwinding Waiver Approvals: The Centers for Medicare and Medicaid Services (CMS) released a new chart that outlines the approved section 1902(e)(14) waiver flexibilities granted to states. These waiver flexibilities support states’ efforts to pursue strategies that facilitate the renewal process and ensure due process protections during the unwinding period following the end of the COVID-19 public health emergency.
  • Treasury Updates NEU Distribution Information for Second Tranche: The Treasury Department updated its table on status of payments to states for distribution to non-entitlement units of local governments (NEUs). The table, last updated August 5, shows the Total NEU Allocation, Second NEU Tranche amount and invoice date, and if a first or second extension has been granted.
  • USDA Partners with 36 States and Territories on P-EBT: The U.S. Department of Agriculture (USDA) announced that as of August 1, 36 states and territories have approved plans to issue electronic benefit transfer (EBT) for children over the summer under the Summer Pandemic-EBT program (P-EBT).
  • DOL OIG Releases Alert on CARES Act Reporting: The Department of Labor (DOL) Office of Inspector General (OIG) released an alert memorandum to the Employment and Training Administration (ETA), indicating some states have not submitted CARES Act Unemployment Insurance (UI) program reports or reported zero activity. The alert notes it is important for ETA to obtain missing reports and correct information. Lists of missing reports can be found in the appendices.
  • FEMA Posts State-Specific Funeral Assistance Data: The Federal Emergency Management Agency (FEMA) released updated monthly data for the COVID-19 Funeral Assistance program. As of August 1, FEMA has provided more than $2.7 billion to over 420,000 people to assist with COVID-19-related funeral costs for deaths occurring on or after January 20, 2020. The release includes data on applications, amount approved, and number of awards by state and territory.
  • FCC Announces $77 Million in Emergency Connectivity Funds: The Federal Communications Commission (FCC) announced it is committing over $77 million in two new funding rounds through the Emergency Connectivity Program. To date, the commission has committed over $5.6 billion to schools and libraries across the country.
  • Treasury Announces $201.9 Million Awarded to North Carolina Under SSBCI: The Treasury Department announced the approval of North Carolina’s application for funding under the State Small Business Credit Initiative (SSBCI). The state was approved for up to $201.9 million and will operate three different programs, including a loan participation program that expands access to capital.
  • Education Posts Information on EANS Reversions, Use of Proportionality: The Department of Education recently posted communications related to the Emergency Assistance to Non-Public Schools (EANS) program: Reverted EANS Funds and Reimbursing Non-Public Schools and ARP EANS and the Use of Proportionality to Determine Non-Public School Eligibility. All prior communications can be found here.
  • ACF Releases Guidance on Expending CSBG CARES Act Funds: The Administration for Children and Families (ACF) sent a Dear Colleague letter noting the development of additional guidance and resources to help Community Services Block Grant (CSBG) grant recipients and eligible entities effectively utilize their remaining CARES Act funds. The letter notes that “it is imperative that all of the CSBG CARES funds are obligated by September 30, 2022 and liquidated by December 30, 2022.”
  • Treasury Publishes Notices on ERA1 Reallocations: The Treasury Department released a notice regarding extensions of the deadline to obligate reallocated Emergency Rental Assistance 1 (ERA1) funds.

 

Administration Declares Monkeypox a Public Health Emergency

On Thursday the Secretary of Health and Human Services (HHS), as a result of the consequences of an outbreak of monkeypox cases across multiple states, determined that a public health emergency (PHE) exists nationwide. Per a release from HHS, the PHE carries important implications for data sharing with the federal government, as 51 jurisdictions have already signed data use agreements that will provide the Centers for Disease Control and Prevention with information related to vaccine administration; it also provides authorities to the Centers for Medicare and Medicaid Services to collect testing and hospitalization data. As of August 4, HHS had shipped more than 602,000 doses of the JYNNEOS vaccine to states and jurisdictions, and HHS has allocated 1.1 million doses in total. The White House also announced a National Monkeypox Response Coordinator and Deputy Coordinator to lead the administration’s strategy and operations to combat the current outbreak.

 

IIJA Implementation Resources Released

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

  • The Federal Highway Administration (FHWA) announced new guidance and $7.3 billion in formula funding under the new Promoting Resilient Operations for Transformative, Efficient and Cost-Saving Transportation (PROTECT) Formula Program. The funding will help states and communities better prepare for and respond to extreme weather events, with funding available over five years. A fact sheet can be found here and estimated state-by-state funding here.
  • The U.S. Department of Agriculture (USDA) launched the $1 billion Community Wildfire Defense grant program, a new five-year competitive program funded by the IIJA. Individual grants will fund up to $250,000 to create and update community wildfire protection plans or conduct outreach and education, and up to $10 million for associated infrastructure and resilience projects; there is a match with a potential for a waiver for underserved communities. Applications are due by October 7.
  • The Department of Transportation (DOT) announced $172.2 million in fiscal year 2022 formula funding under the IIJA to 35 states and 3 territories to improve ferry service and provide more travel options. The IIJA provides $912 million in formula funding over five years through the Ferry Boat Program. The department also released a fact sheet and funding allocations.
  • The Department of Energy (DOE) announced $26 million to fund projects under the IIJA’s Solar and Wind Grid Services and Reliability Demonstration Program. The program will fund up to 10 projects that demonstrate how large-scale solar, wind and energy storage can support the power grid by automatically adjusting to changing demand and disruptions. Concept papers are due by September 1.
  • The Federal Highway Administration (FHWA) announced that all 50 states, the District of Columbia and Puerto Rico have submitted electric vehicle (EV) infrastructure deployment plans as required under the National Electric Vehicle Infrastructure (NEVI) Formula Program. With all state EV deployment plans now submitted, the Joint Office of Energy and Transportation and FHWA will review the plans and continue to work with states, with the goal of approving state plans by September 30.
  • The Department of Energy (DOE) launched new solar initiatives to connect families to more reliable clean energy, lower electricity bills, and create good-paying jobs in the domestic solar industry. These include the Community Solar Subscription Platform, the Advancing Equity through Workforce Partnerships program, and Sunny Awards for Equitable Community Solar.
  • The Federal Highway Administration (FHWA) posted new fact sheets for multiple IIJA programs including the Disadvantaged Business Enterprise Supportive Services Program, Emergency Relief Program, Federal Lands Access Program, Federal Lands Transportation Program, and National Culvert Removal, Replacement and Restoration Grants.
  • The Department of Transportation (DOT) announced a Request for Information (RFI) about the Thriving Communities Initiative, launching this fall. This program will provide technical assistance and hands-on planning support for transformative infrastructure projects that serve disadvantaged communities. Comments are due by August 26.
  • The Department of the Interior (DOI) announced the Notice of Funding Opportunity for nearly $725 million available to 22 states and the Navajo Nation to create jobs and catalyze economic opportunity in coal communities by reclaiming abandoned mine lands. Final guidance was released on July 21 and applications for the fiscal year 2022 IIJA funds must be submitted by eligible states and Tribal programs no later than March 31, 2023.
  • The Federal Communications Commission (FCC) established the Affordable Connectivity Outreach Grant Program to raise awareness about the Affordable Connectivity Program (ACP). The IIJA included a provision for the FCC to conduct and fund ACP outreach, including providing grants to outreach partners. Grants will support governmental and non-governmental partners in conducting outreach activities.
  • The Environmental Protection Agency (EPA) reminded school districts and eligible school bus operators and contractors of the August 19 deadline to apply for funding to begin replacing school buses with clean and zero-emission buses. There is $500 million available in the first round of funding.
  • The White House released updated fact sheets highlighting the IIJA’s impact on states and territories. The individual fact sheets provide detailed information about announced and anticipated funding, as well as signature projects.

 

Fiscal Year 2023 Federal Budget Update

Last month Senate Appropriations Committee Chairman Patrick Leahy (D-VT) released the Chairman’s mark of the 12 appropriations bills for fiscal year 2023. The nearly $1.7 trillion package includes $653 billion in non-defense discretionary spending (10.1 percent increase over fiscal year 2022), $850 billion in defense discretionary spending (8.7 percent increase), $118.7 billion for Veterans Affairs medical care (22 percent increase), and $21 billion in emergency supplemental funding for the COVID-19 pandemic and other emerging diseases. A topline summary can be found here and a summary of the emergency supplemental can be found here. There are no markups scheduled at this time. The House has approved all appropriations bills at the committee level and approved six bills on the floor. The new fiscal year begins October 1, and a continuing resolution may be needed to keep the federal government funded.  

 

Congress Sends CHIPS and Science Bill, PACT Act to President

Last week Congress gave final approval to two pieces of legislation, sending them to the President’s desk for signing. First, the House voted 243-187-1 to approve the CHIPS and Science Act, a bipartisan bill that provides $52 billion in subsidies to domestic semiconductor manufacturers and invests billions in science and technology innovation. The President signed the bill today. Second, the Senate voted 86-11 to give final approval to the PACT Act of 2022, which expands health care for combat veterans and creates a framework for the establishment of future presumptions of service connection related to toxic exposure, along with improved resources for claims processing. The President plans to sign the bill on Wednesday.

 

FEMA Increases Public Assistance Small Project Maximum to $1 Million

On Thursday the Federal Emergency Management Agency (FEMA) announced the agency has implemented a regulatory change to increase the small project maximum for the agency’s Public Assistance (PA) program to $1 million. Section 422 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act allows FEMA to implement simplified procedures for projects below an established threshold; simplified procedures allow FEMA to fund eligible small projects based on estimates, which expedites disaster recovery funding to applicants. The $1 million threshold applies to all projects under major disasters and emergencies declared on or after August 3, 2022. The $1 million threshold also applies to all unobligated PA projects in major disasters and emergencies declared between March 13, 2020, and August 3, 2022.

 

Administration Releases Two Reports on Long COVID

Last week the administration released two new reports on Long COVID to pave an actionable path forward to address Long COVID and associated conditions. The National Research Action Plan on Long COVID details advances in current research and charts a course for future study to better understand prevention and treatment of Long COVID. The Services and Supports for Longer-Term Impacts of COVID-19 report highlights resources for health care workers, and those effected by broader effects of COVID-19, including not only Long COVID but also effects on mental health and substance use, and loss of caregivers and loved ones. Per the press release, an estimated 7.7 to 23 million Americans have developed Long COVID.

 

Education Releases Fact Sheet on Actions to Improve Mental Health, Announces Funds

The Department of Education recently released a fact sheet outlining two new actions to address the youth mental health crisis. First, the department will begin the process of disbursing almost $300 million appropriated in fiscal year 2022 under the Bipartisan Safer Communities Act and omnibus spending bill to help schools hire more school-based mental health professionals. The funding is allocated to two programs: Mental Health Service Professional (MHSP) Demonstration Grant Program and School-Based Mental Health (SBMH) Services Grant Program. In the following months, the administration will deliver additional fiscal year 2022 funding that can be used to expand access to mental health services and supports in schools. Second, a letter was sent to governors highlighting federal resources available to states and schools to invest in mental health services for students. The letter also previews forthcoming Medicaid guidance on how states can leverage Medicaid funding to deliver mental health care services to more students.

 

USDA and EPA Announce Initiative to Improve Wastewater Systems

Last week the U.S. Department of Agriculture (USDA) and Environmental Protection Agency (EPA) announced the new Closing America’s Wastewater Access Gap Community Initiative. The initiative will be piloted in 11 communities where residents lack basic wastewater management, with EPA and USDA jointly leveraging technical assistance resources to help historically underserved communities identify and pursue federal funding opportunities. Each community or Tribe will receive direct support to address wastewater infrastructure shortcomings, including developing wastewater assessments with technical engineering support, developing wastewater community solution plans, identifying and pursuing funding opportunities, and building long-term capacity. Per the announcement, state governments and water agencies have committed to working with the EPA and USDA to support these communities.

 

ACF Releases Guidance on Using CSBG Funds for Mitigating Heat Stress

The Administration for Children and Families (ACF) recently released a Dear Colleague letter on use of the Community Services Block Grant (CSBG) in mitigating heat stress in vulnerable populations. The letter highlights how the CSBG can assist in mitigating heat stress, such as using funds for summer crisis assistance and disaster response. The letter notes that with CSBG’s block grant structure, grant recipients have the flexibility to adjust current programs or implement new programs to mitigate the risks of weather-related events without needing to obtain prior approval. A list of potential activities is also included in the letter.

 

FNS Extends WIC Flexibility for Infant Formula

The Food and Nutrition Service (FNS) recently announced it is extending a key funding flexibility in the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) that has allowed state agencies and their infant formula manufacturers to provide more options for families in need of formula. The coverage of non-contract formula is extended to September 30. More information on FNS’s Infant Formula Shortage Response can be found here.

 

CMS Unveils Maternity Care Action Plan

The Centers for Medicare and Medicaid Services (CMS) recently unveiled its Maternity Care Action Plan that takes a coordinated approach across CMS to improve health outcomes and reduce inequities for people during pregnancy, childbirth, and the postpartum period. CMS also approved new actions in Connecticut, Kansas, and Massachusetts to extend Medicaid and Children’s Health Insurance Program (CHIP) coverage for 12 months after pregnancy and outlined a proposal for a “Birthing-Friendly” hospital designation. The Kaiser Family Foundation has a tracker on state actions to extend Medicaid postpartum coverage. 

 

EPA Releases Guidance to Help Communities Locate Lead Pipes

Last Thursday the Environmental Protection Agency (EPA) released guidance to help communities and water utilities identify lead pipes that connect drinking water service to homes and other buildings. The guidance is intended to help water utilities comply with the requirements of the Lead and Copper Rule Revisions that took effect in December 2021; under the rule revisions, water systems are required to prepare and maintain an inventory of service line materials by October 16, 2024. The guidance will also facilitate investment of $15 billion through the Infrastructure Investment and Jobs Act (IIJA) that is dedicated to lead service line replacement.

 

HUD and VA Announce Funding to Assist Homeless and At-Risk Populations

Two agencies recently announced funds available to assist populations experiencing homelessness or at-risk of homelessness. First, the Department of Housing and Urban Affairs (HUD) announced it will provide $2.8 billion in competitive funding to homeless services organizations for supportive services and housing programs for people experiencing homelessness. The funds will be awarded through the Continuum of Care Program, which funds approximately 7,000 projects annually. Second, the Department of Veterans Affairs (VA) awarded $431 million in grants to 258 non-profit organizations to help homeless and at-risk veterans and their families. The funds are available through the Supportive Services for Veteran Families program and a list of grantees can be found here.

 

DHS Announces Grant Recipients for $1.16 Billion in Climate Resilience Funding

Last week the Department of Homeland Security (DHS) and Federal Emergency Management Agency (FEMA) announced the selections for $1.16 billion in climate resilience funding through two competitive grant programs: Building Resilient Infrastructure and Communities (BRIC) and Flood Mitigation Assistance (FMA). Selections are from fiscal year 2021 funding with $1 billion awarded through BRIC and $160 million through FMA. Additional information on recipients can be found here.

 

USDA Announces $401 Million in Funding for High Speed Internet

The U.S. Department of Agriculture (USDA) recently announced an investment of $401 million to provide access to high-speed internet for 31,000 rural residents and businesses in 11 states. The funding includes investments from the ReConnect Program and an award through the Telecommunications Infrastructure Loan and Loan Guarantee program. The department also announced it will begin accepting applications on September 6 for funding in Round 4 of the ReConnect Program. Applications will be accepted for up to $150 million in loans, up to $300 million in loan/grant combinations, and up to $700 million in grants; funding is available under the Infrastructure Investment and Jobs Act (IIJA). Applications will be due November 2.

 

Recently Released Reports

State Small Business Credit Initiative: Implementation and Funding Issues

Congressional Research Service

2022 Kids Count Data Book

The Annie E. Casey Foundation

Telehealth and Substance Use Disorder Services in the Era of COVID-19: Review and Recommendations

Office of National Drug Control Policy

 

Economic News

Unemployment Claims Reported for Week Ending July 30

The U.S. Department of Labor released unemployment insurance weekly claims data last Thursday that showed for the week ending July 30, the advance figure for seasonally adjusted initial claims was 260,000. This is an increase of 6,000 from the previous week’s revised level, which was revised down by 2,000 from 256,000 to 254,000. The 4-week moving average was 254,750, an increase of 6,000 from the previous week’s revised average of 248,750. The advance seasonally adjusted insured unemployment rate was 1.0 percent for the week ending July 23, unchanged from the previous week’s unrevised rate. The advance number of actual initial claims under state programs, unadjusted, totaled 205,587 in the week ending July 30, a decrease of 9,825 (or -4.6 percent) from the previous week.

 

Economy Adds 528,000 Jobs in July

New data released last week by the U.S. Bureau of Labor Statistics showed that total nonfarm payroll employment increased by 528,000 in July and the unemployment rate edged down to 3.5 percent. The data also shows that in July there were 5.7 million unemployed persons, a decrease of 242,000. The number of long-term unemployed (jobless for 27 weeks or more) decreased by 269,000 to 1.1 million (returning to its February 2020 level), accounting for 18.9 percent of the total unemployed. The labor force participation rate, at 62.1 percent, changed little over the month and remains below its February 2020 value of 63.4. In July, notable job gains occurred in leisure and hospitality (96,000), professional and business services (89,000), health care (70,000), government (57,000), and construction (32,000). Employment showed little change in wholesale trade and other services. State government jobs increased by 10,000, with increases in state government education (+3,300) and state government, excluding education (+6,600). The change in total nonfarm payroll employment was revised up for May (2,000) and June (26,000).

 

GDP Decreased 0.9 Percent in the Second Quarter of 2016

The U.S. Department of Commerce Bureau of Economic Analysis recently released data on the gross domestic product (GDP) for the second quarter of 2022 (advance estimate), showing a decrease at an annual rate of 0.9 percent. In the first quarter, real GDP decreased 1.6 percent. The decrease in real GDP in the second quarter reflected decreases in private inventory investment, residential fixed investment, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by increases in exports and personal consumption expenditures. The “second” estimate for the second quarter, based on more complete data, will be released on August 25.

 

Job Openings Decrease to 10.7 Million in June

The number of job openings decreased to 10.7 million on the last business day of June, according to data recently released by the U.S. Department of Labor (down from 11.3 million in May). The largest decreases in job openings were in retail trade (-343,000), wholesale trade (-82,000) and in state and local government education (-62,000). The number of hires was little changed at 6.4 million in June and the hires rate was little changed at 4.2 percent. The number of separations was little changed at 5.9 million. The 4.2 million quits reported in June were little changed; 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 1.3 million.