Biden administration threatens to claw back Covid funds from Arizona over school anti-mask policies

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  • The Biden administration threatened to cancel millions of dollars in federal coronavirus aid for Arizona, accusing the state of using the money to undermine efforts to stem the spread of the virus.
  • The Treasury Department said in a letter, Republican Governor Doug Ducey’s office has 60 days to either make changes to two federally subsidized state school programs totaling $173 million or to redirect the money toward “qualified uses.” Huh.
  • If Arizona fails or refuses to comply with its demands, the Biden administration could withdraw that stimulus money and withhold a second tranche of pandemic relief funding, the Treasury said.

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The Biden administration on Friday threatened to cancel millions of dollars in federal coronavirus aid for Arizona, accusing the state of using the money to undermine efforts to stem the spread of the virus.

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The Treasury Department said in a letter that the office of Republican Governor Doug Ducey has 60 days to either replace two federally subsidized state school programs worth $173 million or to redirect the money toward “qualified uses.”

The letter said the programs impose conditions that discourage compliance with the wearing of masks in schools, contradicting guidance from the Centers for Disease Control and Prevention on how to reduce Covid transmission.

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If Arizona fails or refuses to comply with Treasury demands, the Biden administration could withdraw that stimulus money and withhold a second tranche of pandemic relief funds, the Treasury said.

Ducey’s office did not immediately respond to CNBC’s request for comment on the letter.

The federal funding in dispute comes from the Coronavirus State and Local Fiscal Recovery Funds Program, or SLFRF, part of a $350 billion multitrillion-dollar COVID relief package called the US Rescue Plan, which President Joe Biden passed into law last year. was signed in

The Treasury noted in a letter to Ducey’s Office of Strategic Planning and Budget that the fund aims to “mitigate the fiscal impacts from the COVID-19 public health emergency, including to support efforts to contain the spread of the virus.” “

But two Arizona school programs use federal funds to “enforce conditions for participating in or accepting a service that undermine efforts to stop the spread of COVID-19 and prevent the spread of COVID-19.” discourage adherence to evidence-based solutions,” the letter said.

$163 Million Education Plus-Up Grant ProgramFor example, the money is given only to schools that do not implement mask requirements, the Treasury wrote.

Other programs in question, a total of $10 million, provides grant money so that parents can take their children out of schools that are deemed “unnecessary closures and imposing school mandates.”

That program is “only available to families if the student’s current or former school requires the use of face coverings during the school day”, the Treasury’s letter said.

The latest letter, sent by Kathleen Victorino, the acting deputy chief compliance officer for the Treasury Office of Recovery Programs, follows a months-long back-and-forth between the Biden administration and the state of the Grand Canyon.

In October the Treasury Department asked Arizona to explain how it would fix the issues identified in the two school programs.

“The state responded a month later, detailing its justification for the anti-mask conditions,” wrote Victorino, but “failed to describe any plans to address the issues identified”.

The latest fight over COVID safety norms comes as an unprecedented rise in cases of highly permeable Omron variant fuels. The US Supreme Court on Thursday blocked the implementation of the Biden administration’s rule for employees at large companies to receive vaccinations or weekly tests, but the High Court upheld a vaccine mandate for health care workers.

But the controversies precede Omicron. Last year, Arizona’s Republican-controlled legislature attempted to pass provisions banning the mask mandate and other COVID protection measures. In November, the state Supreme Court ruled that those measures were passed illegally,

, CNBC’s Tom Franco

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