Feds Could Take Back ARPA Funding in Debt Ceiling Talks

Some funds directed to local governments as part of the $1.9 trillion American Rescue Plan Act (ARPA) could be rescinded as part of Congressional negotiations to raise the debt ceiling, raising concerns among state and local leaders. As Kery Murakami reports in Route Fifty, local leaders say the move to take back funding still in the Treasury Department’s possession could lead to an erosion of trust between officials at different levels of government.

“Detroit Democratic Mayor Mike Duggan, for instance, urged other mayors at a meeting of the U.S. Conference of Mayors last month to quickly spend the money before it could be taken away,” although a House aide clarified that no funding already distributed to local governments would be taken back. “According to a Brookings Institute tracker, the nation’s 329 largest local governments in the country had budgeted 67.8% of the $44 billion of their ARPA funding they’re due to receive.” 

Denise Winfrey, president of the National Association of Counties, says the ARPA funding isn’t as extraneous as some lawmakers might think. “Before that money, we weren't able to give the breadth of services or the depth of services that we needed to and there was a constant demand.” Today, the need has only grown.