Rescinding COVID Relief Funds Saves $30 Billion
As policymakers negotiate a deal to raise the debt ceiling and reduce deficits, reports suggest that rescinding remaining COVID relief funds may be an area where both sides can agree. Policymakers approved nearly $6 trillion of COVID relief funds through legislative action, of which at least $5.6 trillion has been spent according to our interactive COVID Money Tracker tool. While most of the remaining funds are either already obligated to be spent or else never will, the Congressional Budget Office (CBO) has identified over $50 billion of unobligated balances that would be rescinded under the House-passed Limit, Save, Grow Act. These balances remain even as the public health emergency has officially ended and more than two years have passed since the American Rescue Plan was enacted.
According to CBO, rescinding these unobligated balances would reduce Fiscal Year (FY) 2023 budget authority (BA) by about $56 billion and would reduce ten-year outlays by nearly $30 billion. In other words, CBO believes that roughly half of the unobligated balances will ultimately be spent if not rescinded.
Of the total outlay savings, nearly half of the reduction would come from rescinding Department of Health and Human Services funds intended to support health services and supplies, as well as salaries and other program management expenses. Another $2.6 billion of savings would come from rescinding unused transit grants and $2.1 billion from highway infrastructure grants. Rolling back funds for tenant-based rental assistance, an account overseen by the Department of Housing and Urban Development, would reduce FY 2023 budget authority by $2 billion and ten-year outlays by $2 billion, while rescinding Emergency Rental Assistance funds, overseen by the Treasury, would reduce FY 2023 BA by $3.1 billion and ten-year outlays by less than $50 million.
Savings From Rescinding Unobligated COVID Relief Funds
|Federal Funding||2023 Budget Authority||10-Year Outlays|
|Pandemic Health and Social Services Emergency Fund||$17.1 billion||$10.4 billion|
|Indian Health Service||$1.6 billion||$0.9 billion|
|Other Department of Health and Human Services||$6.0 billion||$1.1 billion|
|Transit Infrastructure Grants||$3.5 billion||$2.6 billion|
|Highway Infrastructure Grants||$2.5 billion||$2.1 billion|
|Tenant-Based Rental Assistance||$2.0 billion||$2.0 billion|
|Emergency Rental Assistance||$3.1 billion||<$0.05 billion|
|Disaster Loans Program Account||$1.5 billion||$1.5 billion|
|Veterans Medical Care and Health Fund||$2.3 billion||$1.4 billion|
|State Small Business Credit Initiative||$1.7 billion||$1.3 billion|
|Community Development Financial Institution Fund||$1.2 billion||$1.2 billion|
|Food Supply Chain and Agriculture Pandemic Response||$1.2 billion||$1.1 billion|
|Other Department of Agriculture||$2.7 billion||$1.0 billion|
|All Other||$9.6 billion||$2.8 billion|
|Total||$55.5 billion||$29.5 billion|
Sources: Congressional Budget Office and Committee for a Responsible Federal Budget. Numbers may not sum due to rounding.
Lawmakers must prioritize raising the debt limit to avoid dangerous economic consequences, but also have an opportunity to use the negotiations to put in place fiscal reforms to address our high and rising national debt. The President's FY 2024 budget proposed $3 trillion of deficit reduction and the recent House-passed bill included nearly $5 trillion – both sides should now work together to find common ground and recovering unspent COVID funds is a welcomed place to start.