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Biden admin turns down California request, won’t pay millions to cover inappropriate spending during COVID

Shortly after the beginning of the COVID pandemic and almost immediate closures that followed, the federal government announced dozens of different programs to support the American economy. While some of these programs were meant to directly provide financial aid to the American people, others were made to support businesses in times when all activities were stopped.

Supporting local and state governments

In addition to this, the Biden administration allocated substantial grants to local and state governments to bolster their efforts. These funds were utilized for a variety of local projects, including aiding small businesses and supporting community initiatives through financial assistance. The funds were also deployed for enhancing vital infrastructure, providing emergency relief from natural disasters or their economic repercussions, and backing significant infrastructure projects.

The American Rescue Plan Act

Part of the American Rescue Plan Act was used for combating housing issues exacerbated by the pandemic which included provisions for emergency rental assistance to avert evictions and mitigate housing instability. A portion of this funding was also designated to support the homeless, predominantly channeled through state and local governments. While some states decided to not use all of the money towards these projects, California expended more than what was provided by the federal government. And now, the Biden administration has expressed reluctance to reimburse California for millions of dollars in overspending.

The Biden administrations turns down California request for reimbursement

California cities and counties might be on the hook for more than $300 million they spent placing thousands of homeless residents in hotels in the midst of the COVID-19 pandemic. At the time, local officials made the unprecedented move under the impression that the federal government would reimburse much of their cost for offering shelter, without time limits, to unhoused people at elevated risk of severe symptoms. But the Federal Emergency Management Agency says that they were mistaken and that the agency had only agreed to pay for hotel stays of up to 20 days.

California cities and counties spent $300 million for placing homeless in hotels during COVID, FEMA to pay much less than that

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Cities and counties in California are left on their own as they might have to cover over $300 million they used to house many homeless people in hotels during the COVID-19 crisis. Local leaders thought the federal government would pay back a lot of the money they were spending without limits to help those without homes stay safe from the virus. However, the Federal Emergency Management Agency (FEMA) has now said they only agreed to cover hotel costs for up to 20 days, not indefinitely.

The decision raises concerns

Now, concerned members of the California delegation want answers. A Monday letter by Rep. Robert Garcia (D-Long Beach), signed by 34 other Democratic members and one Republican — Rep. David Valadao (R-Hanford), asks FEMA Administrator Deanne Criswell to reconsider and reimburse cities that are already strapped for cash.

This situation is causing worry, and now some politicians from California are looking for explanations. Rep. Robert Garcia (D-Long Beach), with the support of 34 Democrats and one Republican, Rep. David Valadao (R-Hanford), wrote a letter on Monday to FEMA’s head, Deanne Criswell. They’re asking her to reconsider the initial decision and give the money back to cities. Local governments, most cities in California run low of money further fueled by California’s state budget deficit.

“We’re talking about the single largest loss of life event that we’ve had to go through in over a generation,” Garcia said. “This idea that we’re not going to, in this massive emergency, fully reimburse cities and counties for housing folks… is crazy. FEMA has a responsibility to fix this problem.”

California cities and counties spent $300 million for placing homeless in hotels during COVID, FEMA to pay much less than that
Rep. Robert Garcia (D-Long Beach)

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Los Angeles spent $60 million

Los Angeles is at risk of not getting back $60 million it used from its own funds to help homeless people during the COVID-19 outbreak. This amount is a big chunk of the $194 million the city asked for from FEMA. The city is already not hiring more staff because it doesn’t have enough money. Assistant city administrative officer Ben Ceja said that any returned money would really help the city having in mind the financial difficulties the city of Los Angeles faces.

Examining the problem

This problem started with a letter on October 16 from FEMA’s Regional Administrator Robert Fenton to Nancy Ward, who leads California’s emergency services. After Governor Gavin Newsom ended the state’s stay-at-home order on June 11, 2021, when over 70% of adults had gotten at least one vaccine shot, FEMA said they’d only give money back for hotel stays up to 20 days long. This was based on what the Centers for Disease Control recommended for isolating or quarantining people exposed to COVID-19 or at high risk, like those over 65 or with serious health issues. This included homeless people in crowded places or outside, who were more likely to catch the virus.

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FEMA gave California nearly $10 billion to help the state with the pandemic

Fenton mentioned that FEMA had been clear about these rules since March 27, 2020, even though earlier letters didn’t specifically mention the 20-day limit. The COVID-19 crisis was FEMA’s biggest ever challenge. The agency has given California over $9.4 billion to help with COVID-19. FEMA said that the same rules and process for getting money back apply to all states and local governments for housing homeless people during the pandemic.

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