Some Taxpayer Concerns With the COVID and Ukraine Supplemental Spending Request

Ahead of a March 11 government funding deadline for Congress, the Biden administration has submitted a $32.5 billion supplemental spending request to Congress, specifically to address ongoing challenges from the COVID-19 pandemic and Russia’s invasion of Ukraine.

Few lawmakers would argue that the U.S. continues to face public health challenges from the pandemic, and fewer still would argue that the U.S. should not be considering humanitarian and/or security assistance to the Ukrainian government and its people as they face a violent invasion that threatens their sovereignty.

However, NTU has regularly urged Congress to offset supplemental spending requests, making them at least deficit-neutral – even for urgent priorities. With the nation $30 trillion in debt and running multi-trillion dollar deficits every year, lawmakers must tend to the nation’s fiscal health even as it addresses challenges at home and abroad.

Here’s a glimmer of good news for taxpayers from the Biden administration’s supplemental spending request: the request does not include billions (or tens of billions) of dollars for grants and loans to particular industries or businesses. NTU and six other budget watchdogs warned in January that such a request would be wasteful and unnecessary at this stage of the pandemic.

That said, there’s plenty to worry about in the Biden administration’s supplemental spending request. Here are a few key takeaways for taxpayers.

The Spending Request Would Be Completely Financed by New Debt

The Biden administration could have pulled the $10 billion request for Ukraine assistance out of a Department of Defense (DoD) topline that is already up to $25 billion higher than the Biden administration requested for fiscal year (FY) 2022. It could have also proposed redirecting $22.5 billion in COVID spending from up to $811 billion in COVID relief funds that “remain either unobligated or unspent” as of January 31, according to the Congressional Budget Office (CBO).

Instead, the Biden administration has proposed all $32.5 billion as emergency spending that will ultimately be financed by more debt, which American taxpayers will have to pay back someday.

Even redirecting all $32.5 billion in the request from unobligated or unspent COVID relief funds would have left nearly $780 billion in unobligated or unspent COVID funds remaining. Taking the $10 billion for Ukraine assistance out of DoD’s topline would have still left the topline at least $15 billion higher than what the military even asked Congress for in its budget request this fiscal year. It is a shame that the Biden administration is proposing to add more debt to already record-high levels and that lawmakers appear all too eager to assent to this request.

COVID Funds Are Available Until October 2025

All $18.25 billion of supplemental funding directed to HHS in the COVID relief bucket is available through September 30, 2025. It would be fair for taxpayers to question why new, deficit-financed dollars that are arguably urgent and designated as “emergency” funds are made available for the next 3.5 years. While the COVID-19 disease unfortunately still may be with us in 2025, every policymaker hopes that the most severe public health impacts of the pandemic will have subsided by then. Anticipated needs for FY 2024, FY 2025, and beyond should be dealt with in the regular appropriations process, and these emergency funds could be made available through the end of the current fiscal year (i.e., September 30, 2022) or, at the latest, the next fiscal year (i.e., September 30, 2023).

$1.75 Billion in Ukraine Dollars May Be Returned to DoD if Not Needed

For a $1.75-billion pot of funding requested for DoD (more than a third of their $4.8 billion in emergency appropriations under the request), the funds may be returned to the agency if “all or part of the funds transferred are not necessary for the purposes provided herein.” While Office of Management and Budget (OMB) Acting Director Shalanda Young has already anticipated that “additional needs” in Ukraine “may arise over time,” making it likely that DoD would, indeed, spend all $1.75 billion provided them under this request, it is still concerning that any unnecessary funds would not be returned to the Treasury Department instead.

Some Ukraine Funding Is for DoD Research and Development

As budget watchdog Taxpayers for Common Sense has already pointed out, nearly $150 million of the requested funding for DoD would be under its research and development bucket:

“Wait…say what? Research and Development funding for a contingency operation in Ukraine? We’ve got some questions about this. The fine print says this is for, ‘artificial intelligence-algorithm development, cybersecurity, and other information technology requirements.’ This will bear watching and we’ll keep an eye on it.”

NTU has questions, too. While funding for personnel and operation and maintenance (O&M) costs of overseas deployments makes sense, given the U.S. national security response to Russia’s invasion of Ukraine thus far, any requests for procurement, and especially for research and development (R&D), deserve more scrutiny.

Oversight Needed

While the COVID-19 pandemic and invasion of Ukraine are unique, tragic, and world-altering events, it is significant that the proposed $9.25 billion directed to the Department of State under this emergency request is equal to almost 17 percent of all outlays ($54.58 billion) by the State Department in the prior fiscal year. Spending surges to federal agencies come with an enhanced risk for waste or misuse of taxpayer dollars, and we would encourage Congressional watchdogs and the State Department IG to exercise vigorous oversight of how any emergency funding is spent.