Veterans, carpenters and vaccines: What’s at stake if US COVID aid is canceled

WASHINGTON, March 17 (Reuters) – A Republican proposal to cancel unspent COVID-19 relief money could undercut healthcare for military veterans and pensions for blue-collar workers while doing little to improve the U.S. fiscal picture, a Reuters review of federal spending figures found.

The flood of COVID-relief aid — $5.2 trillion in all — that Congress approved in 2020 and 2021 under Republican President Donald Trump and his Democratic successor Joe Biden has emerged as an early target for House of Representatives Republicans as they search for ways to rein in federal spending.

House Republicans, who hold the majority in that chamber, have said the will not vote to raise the federal government’s $31.4 trillion debt limit without a deal to cut spending. Failure to raise the limit would lead to a default that would shake the economy.

But unspent COVID aid is a small target, with less than $80 billion unspent as of January, White House budget figures show. Medical programs to combat the virus have run through most of their funding and the expanded safety-net programs that helped Americans weather the disruption have largely run their course.

That total — 1.5% of the amount authorized by Congress — will decline further in coming months as federal agencies continue to push money out the door. Federal spending on health care and food stamps is also due to decline when Biden allows the government’s public-health emergency to expire in May.

“At this point we are so late in the game that we are just not going to recover much,” said Marc Goldwein, a policy director at the Center for a Responsible Federal Budget, a nonpartisan watchdog group.

Republicans say that’s no reason to ignore the remaining money as they assemble a spending-cut proposal.

“Clawing back any unspent funds from the trillions that Washington flooded the economy with during the pandemic is an obvious starting place for any debt ceiling discussion,” said Tim Reitz, executive director of the House Freedom Caucus, one of several Republican groups that has said the remaining aid should be canceled.

Democrats and Republicans have largely agreed not to trim the Social Security and Medicare programs, which account for about one-third of the nation’s $6.2 trillion budget, leaving lawmakers to look for smaller targets for cuts.

CARPENTERS, VETERANS AND MEDICAL RESEARCH

Reclaiming unspent COVID funds would have real-world repercussions.

The largest chunk, $47 billion, is earmarked for financially troubled union pension funds that have asked the federal Pension Benefit Guaranty Corporation for help. The agency prioritized the most troubled pension funds first and is now working with those that are less in need of immediate aid, a White House official said.

If Congress reclaimed that money, fishermen in Massachusetts and carpenters in Ohio, would be among the roughly 1 million union workers that would not receive their full retirement benefits.

A clawback could also affect veterans’ healthcare, as the Department of Veterans Affairs has yet to spend $4.6 billion of the money it received for COVID-19 related care. The health system is currently treating 4,500 patients for the disease, according to an…