City Officials Condemn Congress' Failed Plan to Claw Back ARPA Funds, Vow to Fight Future Attempts

Officials with the nation’s cities expressed outrage at Congress’ attempt last week to claw back about $7 billion in American Rescue Plan Act funds from 30 states—a move that Clarence Anthony, CEO and executive director of the National League of Cities, said would have hurt municipalities as well.

NLC officials vowed to fight any effort to resurrect the cuts.

“Some of those dollars were projects that were going to partner with local government to return, renew, rebuild and create jobs,” Anthony said during a press conference Monday at NLC’s annual Congressional City Conference in Washington, D.C.

During negotiations to pass a massive $1.5 trillion federal spending bill last week, House Democratic leaders initially acceded to Senate Republican demands to find cuts to offset the cost of $15 billion in new emergency Covid-19 funding the Biden administration requested for the Department of Health and Human Services.

Democrats agreed to take about half of that sum from ARPA payments still due to 30 states, but scrapped the idea amid stiff resistance from some members within their party, as well as state and local officials. Democrats opted instead to remove the emergency Covid funding from the larger spending bill.

The House plans to vote on that funding as a separate bill, possibly this week, paid for with other unspent federal funds that would not come from state or local governments. 

However, Senate Republicans, who believe ARPA was too expensive and are upset the administration does not have better information about how state and local aid and other money from the pandemic relief law is being spent, could again try to pull back the dollars from states when the Covid-19 bill is sent over by the House. And at least one GOP senator suggested last week that they are likely to do so.

“We thought it was unbelievable that Congress would even consider trying to claw back dollars from state and local governments because their plan has already been developed,” Anthony said. “The projects have already been teed up and we're just starting to move. For someone to consider at this time, on the one-year anniversary of ARPA, to try to claw back those funds was just shocking to us.”

“We're going to work to make sure that that does not happen as local government officials and work with the administration to help educate Congress about what we are doing with those dollars,” he said.

Vince Williams, mayor of Union City, Georgia and the group’s president, also admonished Congress, saying it should not have dolled out the funds with the intention it could take them back. 

The failed plan to revoke the funds would have only directly affected money flowing to states, not cities. House Speaker Nancy Pelosi highlighted last week that Democrats shielded localities from the proposed cuts.

Cities have used their $65.1 billion share of the rescue package to deal with the “devastating economic effects" of the pandemic, Williams said, adding: “Our communities were responsible for keeping essential services up and running in the face of the economic hardship.”

He provided a few examples, noting that Lakewood, Ohio is using the funds to support an emergency rental assistance program for residents facing eviction and Atlanta is fighting food insecurity.

According to an effort to track how local governments are spending the dollars, the 152 cities and counties being followed have only decided what to do with 48.6% of their ARPA dollars. The last update to that data being tracked by the NLC, Brookings Metro and the National Association of Counties was in February. 

The 41 cities being tracked had spent 60% of their money.

Biden Offers Recommendations for ARPA Spending

Addressing the city officials Monday at the NLC event, President Biden touted ARPA for helping allow local governments to rehire workers.  

“One year after signing this law, our cities, our towns and our rural communities are roaring back,” he said. “Before this law, state local governments were still down more than a million jobs from before the pandemic. We’ve had at least a year of state and local job growth, the largest in 20 years, adding 467,000 jobs. Educators, firefighters, police officers are back on the job.”

Biden, who reminded the officials he was once a New Castle County, Delaware councilman, also noted that of the $350 billion in ARPA aid for state and local governments, “we made sure that $130 billion of that went straight to local governments.” That's in contrast to an earlier round of coronavirus relief that provided direct federal aid only to states and larger-sized localities.

“As a former local official, I know that it matters, having that flexibility and control to meet both the short-term and the long-term challenges you face,” he said.

Biden urged the officials to use ARPA funds to reduce violent crime, decrease homelessness and train workers needed to do the projects that will be funded under the $1.2 trillion bipartisan infrastructure law he signed into law last year. 

“It's now time for cities and towns to get ready,” he said. “You don't have to wait until these infrastructure projects start. You're going to need more welders, pipefitters, advanced manufacturers, and it takes training to get the job done well.”

Editor's note: This story was updated to paraphrase a quote from Mayor Vince Williams.