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Biden administration threatens to claw again Covid funds from Arizona over college anti-mask insurance policies

U.S. first woman Jill Biden speaks with folks throughout a tour of a COVID-19 vaccination web site at Isaac Center College in Phoenix, Arizona, June 30, 2021.

Carolyn Kaster | Pool | Reuters

The Biden administration on Friday threatened to rescind thousands and thousands of {dollars} in federal coronavirus help for Arizona, accusing the state of utilizing the funds to undermine efforts to cease the unfold of the virus.

Republican Gov. Doug Ducey’s workplace has 60 days to both change two federally sponsored state college packages totaling $173 million, or redirect the cash towards “eligible makes use of,” the Treasury Division mentioned in a letter.

The packages impose circumstances that discourage compliance with carrying masks in faculties, contradicting steerage from the Facilities for Illness Management and Prevention on learn how to cut back Covid transmission, the letter mentioned.

If Arizona fails or refuses to adjust to Treasury’s calls for, the Biden administration might claw again that stimulus cash and withhold a second tranche of pandemic reduction funding, Treasury mentioned.

Ducey’s workplace didn’t instantly reply to CNBC’s request for touch upon the letter.

The federal funds in dispute come from the Coronavirus State and Native Fiscal Restoration Funds program, or SLFRF, a $350 billion chunk of the multitrillion-dollar Covid reduction bundle, dubbed the American Rescue Plan, that President Joe Biden signed into law last year.

The funds are supposed “to mitigate the fiscal results stemming from the COVID-19 public well being emergency, together with by supporting efforts to cease the unfold of the virus,” Treasury famous within the letter to Ducey’s Workplace of Strategic Planning and Budgeting.

However Arizona’s two college packages use the federal cash to “impose circumstances on taking part in or accepting a service that undermine efforts to cease the unfold of COVID-19 and discourage compliance with evidence-based options for stopping the unfold of COVID-19,” the letter mentioned.

The $163 million Education Plus-Up Grant Program, as an illustration, permits funds be given solely to varsities that don’t implement masks necessities, Treasury wrote.

The other program in question, totaling $10 million, supplies grant cash to assist mother and father transfer their youngsters out of colleges which are deemed to be imposing “pointless closures and faculty mandates.”

That program “is on the market solely to households if the coed’s present or prior college requires using face coverings” through the college day, Treasury’s letter mentioned.

The newest letter, despatched by performing Deputy Chief Compliance Officer Kathleen Victorino of the Treasury Workplace of Restoration Packages, follows months of back-and-forth between the Biden administration and the Grand Canyon State.

The Treasury Division in October had requested Arizona to elucidate how it will repair the problems recognized within the two college packages.

The state responded a month later, detailing its rationale for the anti-mask circumstances however failing to “describe any plans for remediation of the problems recognized,” Victorino wrote.

The newest struggle over Covid security guidelines comes because the extremely transmissible omicron variant fuels an unprecedented surge in circumstances. The U.S. Supreme Courtroom on Thursday blocked enforcement of the Biden administration’s rule for workers in massive corporations to both get vaccinated or obtain weekly testing, however the excessive court docket left intact a vaccine mandate for health-care staff.

However the disputes precede omicron. Final yr, Arizona’s Republican-controlled legislature tried to cross provisions banning masks mandates and different Covid security measures. In November, the state Supreme Courtroom ruled that those measures were passed illegally.

CNBC’s Tom Franck contributed to this report.

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