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Gov. Phil Murphy. (Photo: Kevin Sanders for the New Jersey Globe)

Murphy rails against federal limits on COVID-19 aid

New guidance bars use of bailout funds to replace lost revenue

By Nikita Biryukov, April 23 2020 4:45 pm

Gov. Phil Murph railed against new guidance issued by the U.S. Treasury Department that significantly limits the ways states can use aid money made available as part of the $2 trillion bailout signed into law last month.

“I was assured that this funding would be able to be used flexibly by states, filling holes that we now must deal with. Those assurances, apparently, were empty,” Murphy said. “Treasury’s guidance renders much of this funding literally unusable, and without additional flexibility, will mean that we will likely not only not be able to use it, but we’ll have to return a good chunk of it to the federal government.”

On Wednesday, the Treasury informed states that aid provided under the Coronavirus Aid, Relief, and Economic Security (CARES) Act could only be used for “necessary expenditures” made as part of a response to the pandemic between March 1 and Dec. 31, 2020.

The guidance specifically bars the use of aid money to plug holes left by revenue lost as a result of the crisis.

“Sadly, the message from Washington to our first responders and our educators and to others on the frontlines is clear: As you work tirelessly to stop this pandemic, to keep people safe, our national leadership thinks you are non-essential and, in fact, that you should fear for your jobs.”

Murphy grew visibly irate for the second time in as many days as he railed against the federal decree.

On Wednesday, Murphy railed against Senate Majority Leader Mitch McConnell over his suggestion that states be allowed to declare bankruptcy to deal with the fiscal tumbles caused by COVID-19.

The governor said he has spoken with Democratic leaders in both chambers of Congress about the new guidance.

“We will not relent until the federal government provides the support we need to protect the services that millions of residents rely upon, and remember this: I, and we, will never stop fighting for you,” he said. “We will fight this to the death.”

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