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Biden administration threatens to claw back Covid funds from Arizona over school anti-mask policies

U.S. initial girl Jill Biden speaks with men and women throughout a tour of a COVID-19 vaccination web-site at Isaac Middle School in Phoenix, Arizona, June 30, 2021.

Carolyn Kaster | Pool | Reuters

The Biden administration on Friday threatened to rescind tens of millions of dollars in federal coronavirus assist for Arizona, accusing the condition of employing the resources to undermine attempts to quit the unfold of the virus.

Republican Gov. Doug Ducey’s office environment has 60 days to either transform two federally subsidized state university courses totaling $173 million, or redirect the income towards “eligible uses,” the Treasury Division mentioned in a letter.

The applications impose circumstances that discourage compliance with sporting masks in faculties, contradicting assistance from the Facilities for Disorder Management and Avoidance on how to reduce coronavirus transmission, the letter stated.

If Arizona fails or refuses to comply with Treasury’s requires, the Biden administration could claw again that stimulus cash and withhold a 2nd tranche of pandemic reduction funding, Treasury explained.

Ducey’s office did not straight away respond to CNBC’s ask for for remark on the letter.

The federal cash in dispute occur from the Coronavirus Point out and Community Fiscal Restoration Cash application, or SLFRF, a $350 billion chunk of the multitrillion-dollar Covid aid offer, dubbed the American Rescue Prepare, that President Joe Biden signed into legislation last calendar year.

The resources are meant “to mitigate the fiscal effects stemming from the COVID-19 public health and fitness emergency, like by supporting efforts to halt the distribute of the virus,” Treasury famous in the letter to Ducey’s Workplace of Strategic Preparing and Budgeting.

But Arizona’s two college plans use the federal income to “impose conditions on participating in or accepting a company that undermine efforts to prevent the unfold of COVID-19 and discourage compliance with proof-primarily based solutions for stopping the distribute of COVID-19,” the letter mentioned.

The $163 million Education and learning Plus-Up Grant Application, for instance, enables funds be specified only to schools that do not implement mask specifications, Treasury wrote.

The other system in issue, totaling $10 million, delivers grant income to support dad and mom transfer their children out of schools that are deemed to be imposing “needless closures and university mandates.”

That method “is accessible only to people if the student’s present-day or prior college needs the use of facial area coverings” throughout the university working day, Treasury’s letter reported.

The latest letter, sent by performing Deputy Chief Compliance Officer Kathleen Victorino of the Treasury Business of Recovery Systems, follows months of back again-and-forth amongst the Biden administration and Arizona.

The Treasury Division in Oct experienced questioned Arizona to clarify how it would fix the concerns recognized in the two school plans.

The state responded a month afterwards, detailing its rationale for the anti-mask situations but failing to “explain any programs for remediation of the challenges recognized,” Victorino wrote.

The hottest fight about Covid protection policies comes as the highly transmissible omicron variant fuels an unprecedented surge in instances. The U.S. Supreme Court docket on Thursday blocked enforcement of the Biden administration’s rule for workers in large corporations to possibly get vaccinated or receive weekly screening, but the superior court docket still left intact a vaccine mandate for wellness-care staff.

But the disputes precede omicron. Final yr, Arizona’s Republican-controlled legislature experimented with to go provisions banning mask mandates and other Covid basic safety steps. In November, the condition Supreme Court dominated that people measures ended up handed illegally.

CNBC’s Tom Franck contributed to this report.

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