PROVIDENCE, RI – Today, U.S. Senator Jack Reed announced that for the second time in just over a week, the U.S. Treasury Department wired a $625 million payment into Rhode Island’s bank account, and the state has finally received its guaranteed allocation of $1.25 billion in Coronavirus Relief Funds that Senator Reed championed in the Coronavirus Aid, Relief and Economic Security (CARES) Act (Public Law No. 116-136). 

“This provides a measure of certainty during an uncertain time.  These funds will help saves lives and bolster the state’s ability to help more people and support real Main Street businesses through this public health emergency,” said Senator Reed, who was part of a twenty-member bipartisan working group that helped craft the CARES Act and took a lead role in creating the $150 billion Coronavirus Relief Fund for states.  He successfully insisted on a $1.25 billion small state minimum and no state or local matching requirement.

The U.S. Senate passed the CARES Act on March 25 and it was signed into law on March 27.  Nearly a month later, the U.S. Treasury Department issued initial guidance, outlining ways states may utilize Coronavirus Relief Funds to help pay for a range of COVID-19-related costs.  Senator Reed says the initial list is a start, but he wants Treasury to faithfully execute the law, not erect new bureaucratic barriers outside the law, and is urging President Trump to adjust the guidelines in order to confirm that replacing lost or delayed revenues is a permitted use of funds.

“I created the Coronavirus Relief Fund to provide meaningful relief, and we got it passed in Congress with unanimous support.  But now, the Trump Administration is back to feuding with governors and trying to bind them with needless bureaucratic red tape.  The Administration should just follow the letter of the law and ensure this money is spent wisely to save lives and help rescue our economy.  I will continue working across party lines to ensure that’s what happens, but is clearly up to the president and Congressional Republicans to decide if they actually want to help states and cities.  So far, Democrats are the only ones making it a priority,” said Reed.

The law allows states to use the funding for costs related to the COVID-19 pandemic.  The funds may only be used to cover costs incurred between March 1 and December 30, 2020. 

While Treasury’s initial guidance fails to provide states with maximum flexibility authorized under the law, it does ensure the money can be used for an array of pressing needs.  The “non-exhaustive list” from Treasury’s guidelines include:

  • Medical expenses, including costs to enhance the state’s COVID-19 testing capacity;
  • Public health costs, including quarantining the sick, disinfecting public areas, buildings and nursing homes, and public health-related communications costs;
  • Purchase and distribution of personal protective equipment (PPE) and gear for medical staff, first responders, and other essential public employees;
  • Expenses for establishing temporary public medical facilities related to COVID-19, including construction costs;
  • Unemployment insurance costs related to COVID-19 crisis that will not be reimbursed by the federal government;
  • Economic support for small businesses, including expenditures related to the provision of grants to small businesses to reimburse the costs of business interruption caused by closures;
  • Payroll assistance for public safety, health, and other employees whose jobs are “substantially dedicated” to mitigating or responding to COVID-19 public health emergency;
  • Food delivery to residents, elderly people, and “other vulnerable populations”;
  • Education and technology costs to enhance distance learning and expanded telework for public employees;
  • Paid sick leave and family leave for public employees required to enable compliance with COVID-19 public health precautions;
  • Help for homeless populations and mitigating the spread of COVID-19 in state prisons and local jails;

Significantly, the guidance notes that states may not use Coronavirus Relief Funds to pay for the state’s matching share of Medicaid costs, which accounts for a significant portion of Rhode Island’s budget.  However, Senator Reed already helped pass a separate law, the Families First Coronavirus Response Act (Public Law No. 116-127), enhancing the federal Medical Assistance Percentage (FMAP) match, which boosts the share the federal government pays for Medicaid costs by 6.2 percent, equating to an extra $150 million for Rhode Island.

Reed continued: “The state is better off with this money than without it.   I don’t see why President Trump would not agree that this money should be used to help save lives and rescue our economy.  In order to effectively do that, there should be minimal bureaucracy.  So I urge the president to provide further clarity so all fifty states have the certainty and flexibility that Congress provided in the law.  We’re in emergency response mode here, and time is of the essence.  Unnecessary bureaucratic barriers will only delay, distract, and deepen fiscal pain across all fifty states.  This money was designed to help states, and at a time like this, we need to both trust and verify that states on the frontlines of this crisis are doing the right thing so our country is in the best position to contribute to a robust economic recovery.”

Senator Reed is working to provide an additional $600 billion in Coronavirus Relief Funds to help states, cities, and towns.  Unfortunately, throughout recent legislative negotiations, the Trump Administration and Senate Republicans have expressed opposition to further funding for states and localities.  If that opposition continues, it will leave states and communities across the country further stressed and unable to prevent further economic decline. 

“This is a lot of money, but in the kind of economic tailspin we’re seeing, we need to act boldly.  I’m for doing more, but I worry the Administration mistakenly believes we’ve done enough,” concluded Reed.