Officials: Nassau, Suffolk COVID funds appear safe from debt bill "clawback"

WASHINGTON — The debt-ceiling bill Congress passed this week will rescind nearly $28 billion in unspent COVID-19 relief and other federal funds but is not expected to claw back any of the more than $600 million granted two years ago to Nassau and Suffolk counties.

The bipartisan deal negotiated by House Speaker Kevin McCarthy (R-Calif.) and President Joe Biden leaves it up to congressional committees to decide how to claw back the unspent funds, much of them earmarked to respond to the COVID-19 pandemic.

The massive COVID-19 relief packages enacted since 2020 aimed to boost the U.S. economy by giving local governments discretion to use the funds to pay for public health needs, replace lost tax revenue and fund infrastructure projects.

House Republican negotiators had pushed to rescind unspent COVID-19 funds as part of an overall effort to cut government spending. McCarthy and House GOP negotiators made the budget cuts a condition for lifting the debt ceiling to pay the nation’s existing debts.

White House Budget Director Shalonda Young told reporters on Tuesday it is common for Congress to make “adjustments all the time” to spending packages, and noted the deal still preserved nearly $5 billion in funding for the development of new COVID-19 vaccines and treatments.

“The appropriators will use some of that money to spread around, how they see fit,” Young said of the rescinded funds. "We didn't get into the individual line items in this bill."

A U.S. Treasury official with knowledge of the issue told Newsday that funding that already has been distributed to state and local entities is considered obligated and will not be clawed back.

Nassau received $385 million in American Rescue Plan Act funds, Suffolk received $286.8 million and 13 towns on Long Island received a total of $262.8 million, according to federal and state data.

Nassau had obligated $66.1 million of that as of April, while Suffolk had obligated $40.5 million. The funds must be allocated before the end of 2024 and spent by the end of 2026, or they will be returned to the federal government.

Reps. Anthony D’Esposito (R-Island Park), Andrew Garbarino (R-Bayport) and Nick LaLota (R-Amityville) voted in favor of the debt-ceiling bill, which passed the House by a 314-117 vote. Rep. George Santos (R-Nassau/Queens) voted against the measure, citing in part his concern that it did not sufficiently cut government spending.

Senate Majority Leader Chuck Schumer and Sen. Kirsten Gillibrand, both New York Democrats, voted in favor of the bill, which cleared the Senate by a vote of 63-36.

Schumer spokesman Angelo Roefaro said Schumer "successfully worked to undo cuts that directly affected Long Island and Republicans put in their bill." 

Roefaro said, "if any other clawback would affect Long Island, Senator Schumer will fight them in the upcoming budget process."

Treasury Secretary Janet Yellen had warned that the debt ceiling needed to be raised no later than June 5 for the nation to avoid defaulting on its loans.

Biden is expected to sign the debt-ceiling bill at the White House on Saturday.

With Vera Chinese, Scott Eidler and Candice Ferrette