America’s states and cities are receiving $350 billion from Washington, an unprecedented move to head off a fiscal crisis that could have derailed the economic recovery, Bloomberg reported. But at least two dozen local governments and lobbying groups are pushing President Joe Biden’s administration to allow the federal funds to be used for something the Treasury Department hadn’t envisioned: paying down debt or socking it away. Among them is Oceanside, a 176,000-person city on the Southern California coast. Michael Gossman, assistant city manager, wants to be able to use the federal aid to replenish reserves drawn down last year so the city could increase services for the homeless and deliver meals to the elderly during the pandemic. “It’s not that we’re asking for a blank check,” he said. The push shows a small rift that’s opened as the economy surges back from the pandemic, saving governments from facing the type of crippling budget deficits that lingered for years after the last recession. With their finances broadly on the mend, some officials want to use it to replenish depleted savings accounts or pay off debt run up last year to stay afloat as much of the nation shut down. That’s put them at odds with Treasury regulations seeking to ensure the funds are plowed back into the economy.
