US May Use Its $30 Billion Unspent Covid Funds For Relief As Possibility Of Debt Default On June 1 Rises

As the chances of the US defaulting on its debt payments and running out of cash as soon as June 1 rise, the country seems to have found a small but significant ray of hope.

Amid $31 Trillion Debt, US May Use Unspent Covid Funds

Now that the covid emergency is over, as confirmed by WHO as well earlier this month, the US may use $30 billion from covid funds to avoid a default on the nation¡¯s debt, which could happen as soon as June 1. As per a New York Times report, unspent pandemic funds can even be higher- an amount estimated to be between $50 billion and $70 billion.

And it¡¯s something the US President Joe Biden has said he¡¯d take a ¡°hard look at it.¡±

¡°We don¡¯t need it all,¡± Biden told reporters earlier this month. ¡°It¡¯s on the table.¡±

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But this decision would be dependent on other things as well. like the mayors are still counting on transit funding and other help. Some nursing homes say they still need their relief payments from the covid funds. And public health advocates worry that using covid funds will hurt efforts to prepare for the next virus and take money away from a persistently underfunded public health system.

¡°It¡¯s pennywise and pound foolish,¡± said Dr Michael Osterholm, a University of Minnesota epidemiologist who served on President Joe Biden's COVID transition team. ¡°Because there will be additional pandemics.¡±

House Speaker Kevin McCarthy, R-Calif., said the money was intended for the COVID-19 pandemic which he said is over. "If the money was authorized to fight the pandemic but was not spent during the pandemic, it should not be spent after the pandemic is over,¡± he said last month, as per USA Today's report.

Also Read: White House Warns Of Loss Of 8 Million Jobs & Stock Market Crash If US Defaults On Debt Next Month

Too Little, Too Late?

The remaining $30 billion is dwarfed by the more than $31 trillion in debt the nation owes. But it would still help, says Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a non-partisan fiscal watchdog group.

¡°I don't think there's any scenario where one should dismiss $30 billion as not real money,¡± she said. Even though much of the money would go to ¡°incredibly important causes,¡± MacGuineas said, the pandemic is no longer an emergency so lawmakers should find a way to pay for the spending as part of the regular budget process.

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Pandemic Funds Still In Use

One of the largest pots of remaining funds is in a Department of Health and Human Services account to address a wide range of natural and man-made public health threats.

House Democrats say the money is still needed to keep the Strategic National Stockpile full of essential medical supplies, to shore up hospitals and nursing homes, and to develop vaccines and treatments for future variants, as per the USA Today report.

¡°You don¡¯t stop funding the fire department when there haven¡¯t been any fires,¡± said Dr Alonzo Plough, chief science officer at the Robert Wood Johnson Foundation and the former public health commissioner for Boston and Seattle. ¡°There¡¯s so much more to do that we cannot declare victory in protecting the public health around emergent threats and erode the funding.¡±

Even if the funds aren¡¯t taken back, the nation¡¯s public health system would not have enough money, said Dr Shelley Hearne, a professor of public health at Johns Hopkins University.

¡°We¡¯re cutting unspent funds that are absolutely needed,¡± she said. ¡°We have shortchanged public health for over 20 years.¡±

Also Read: Explained: What Is Dedollarisation & Why Are Countries Dumping The US Dollar?

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