What’s at stake if US COVID aid is canceled By Reuters

By Andy Sullivan

WASHINGTON (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…