Debt-Limit Bill Cancels Almost $30 Billion in Pandemic Relief Funding

President Biden signed a bipartisan congressional resolution in April to end the national emergency response to the Covid-19 pandemic.
President Biden signed a bipartisan congressional resolution in April to end the national emergency response to the Covid-19 pandemic.


  • Most money being clawed back is unrelated to Covid-19, or for programs that have already concluded

A deal between President Biden and congressional Republicans to lift the debt ceiling claws back billions of dollars in unspent pandemic relief funding but leaves money in place for front-line Covid-19 investments such as next-generation vaccines and testing.

Almost $30 billion in unspent funding approved during the pandemic will be rescinded under the legislation, which passed the Senate Thursday and is headed to Biden’s desk, but most of that is unrelated to Covid-19. Instead, it will be taken from a host of agencies that have been looking at spending the money on such programs as highway infrastructure, disaster loans, and rural broadband expansion, according to people familiar with the deal.

The agreement leaves in place billions in planned spending for Covid-19 measures, veterans health benefits, the Indian Health Service, and low-income rental assistance.

The pandemic triggered a spending wave as the country wrestled with developing a vaccine and rolling it out nationally, economic malaise and the shut down of businesses to combat the virus. Lawmakers passed six spending bills totaling about $4.6 trillion.

Almost all pandemic funding that was available before the 2021 passage of the American Rescue Plan, a $1.9 trillion economic stimulus bill, has been exhausted, according to the Office of Management and Budget.

The public health emergency expired on May 11, and deaths have declined by more than 95% since January 2021.

With the virus’ impact waning, Republicans have sought to rescind some unspent pandemic funding. The Biden administration initially resisted that effort, in part because officials were worried it could hurt efforts to combat Covid-19 and because they want more pandemic funding from Congress for the development of next-generation vaccines and therapeutics.

Health leaders have warned that the virus could continue to mutate, with a new variant and offshoot of Omicron, XBB. 1.16, spreading in the U.S. A fall booster campaign is expected to include vaccines that target that variant.

The deal, however, carves out a number of exceptions related to Covid-19 amounting to about $13 billion. Health and Human Services will retain more than $10 billion under a proposal to protect priority investments such as next generation vaccines, test procurement capacity, long Covid research, and other essentials.

The agency in May announced a $5 billion initiative for Project NextGen, a public-private collaboration aimed at rapid development of next generation vaccines that could potentially offer longer protection and prevent transmission.

Another $800 million will remain in place to fund such investments as strengthening pharmaceutical supply chains. The pandemic led to such increased demand for certain medications that a number of drugs were in short supply. The shortages were exacerbated by the U.S. reliance on China, India and other countries as main drug suppliers.

The Centers for Disease Control and Prevention will retain about $1.5 billion for measures such as genomic surveillance to identify Covid-19 variants and investments in vaccine safety and effectiveness. About $500 million will remain in a fund for rapid response to infectious diseases.

The administration agreed to claw back most Covid-19 funding that doesn’t directly relate to front-line efforts to combat the virus. The money will come in large part from programs that have already concluded or where there weren’t current spending demands.

For example, the agreement will rescind about $1 billion from the Labor Department job service and unemployment insurance programs. During the pandemic, state unemployment insurance, which is a joint state and federal program, was expanded to include workers not typically eligible for unemployment benefits. About $500 million will be left behind to protect state grants aimed at combating identity theft and fraud, the sources said.

The department didn’t reply to a request seeking comment.

Separately, $2.2 billion will be taken from the Transportation Department’s highway infrastructure programs. The department didn’t respond to a request for specifics on the funding that will be rescinded

More than $3 billion will come from the Agriculture Department, including programs to strengthen the U.S. food supply system. The pandemic posed challenges to food supply when some plants were closed after workers became infected with Covid-19, farms faced labor shortages, and imports of fruits and vegetables were disrupted. The department didn’t reply to a request seeking comment.

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