ARPA Clawback Axed from Appropriations Bill

Leaders in the U.S. House of Representatives unveiled early Wednesday the federal consolidated appropriations bill to fund the federal government through September 30, 2022. The measure includes $1.5 trillion in discretionary funding for the federal fiscal year, but the bill faced swift backlash among rank-and-file members because of proposed American Rescue Plan Act (ARPA) offsets.

Nearly a year after Congress authorized $130.2 billion for cities and counties through ARPA, the proposed appropriations bill included a provision that would claw back $7.055 billion of unobligated money through the State and Local Fiscal Recovery Funds. Republican negotiators insisted on the offset to help fund an additional $15.6 billion of special coronavirus funding.

Some House Democrats in states that the clawback provision would disproportionately impact objected to approving the procedural rule that would expedite passage of the legislation. House Speaker Nancy Pelosi (D-CA) announced Wednesday afternoon that the Rules Committee would remove the new coronavirus funding and the ARPA clawback.

The provision targeted unspent ARPA money in states, but territories, tribes, and local governments also faced potential revenue losses. Several members of Congress recently expressed frustration that many states have not used their ARPA dollars quickly.

Kentucky cites have also slowly spent their ARPA funds, but the Final Rule approved by Treasury does not officially take effect until April 1, 2022. Municipalities have had to wait many months to get clear guidance, and most cities have not yet had to report on uses of funds.

The massive omnibus measure funds the entire federal government because Congress failed to pass any of the normal 12 appropriations bills. H.R. 2471 increases non-defense funding by 6.7% compared to Fiscal Year 2021 and ups defense funding by 5.6%. It also includes special funding legislation that provides $13.6 billion to support Ukraine.

The Department of Transportation will receive $102.9 billion to invest in airports, highways, transit, passenger rail, and port systems. The bill unlocks historic funding authorized in the Bipartisan Infrastructure Law for road maintenance, bicycle and pedestrian infrastructure, and more. The newly created Thriving Communities Program will receive $30 million to provide technical assistance, planning, and capacity building to underserved rural and urban communities.

Nearly $3.9 billion – a half-billion-dollar increase – will go to state and local law enforcement grants. The Byrne Justice Assistance Grant (JAG) program will receive $674.5 million, while the Community Oriented Policing Services (COPS) program will get $512 million to support local police departments. The bill provides $720 million for firefighter grant programs.

Even though House leaders released the 2,741-page legislation Tuesday night, the House of Representatives passed the federal omnibus appropriations bill and the continuing resolution extension late Wednesday night. The resolution extends the federal funding deadline from March 11 to March 15 to provide the Senate more time to clear the package.

Go here to access section summaries and one-pagers of the omnibus appropriations bill.