Covid funding is drying up, White House warns US lawmakers

[NEW YORK] The Biden administration is warning lawmakers that the US doesn't have enough money on hand to respond to future Covid-19 variants, stockpile vaccines or develop new technologies.

Funds for pandemic response - including testing, vaccine distribution and other medical supplies - have been either spent or set aside already for purchases, according to a Department of Health and Human Services document obtained by Bloomberg News. All funds provided so far have been spent or earmarked for use.

Early in Joe Biden's presidency, the US Congress passed a US$1.9 trillion federal aid package known as the American Rescue Plan that replenished funds needed to respond to the Covid-19 pandemic. But now nearly all the health-specific resources from the rescue plan, as well as other bills, have been spent or allocated, including resources that are financing ongoing Omicron response efforts, according to a Biden administration official familiar with the funding.

Another Biden administration official said that if Congress doesn't quickly provide additional money, the US could once again be caught off-guard if another Covid-19 variant strikes, as it was when the Omicron wave hit last year.

Bipartisan consensus is critical to ensuring the US doesn't run low on vaccines, tests or treatments, that official said, speaking on condition of anonymity about the matter. The administration will be unable to prepare for a potential new wave without congressional action, the official said.

The official pointed to the Omicron surge as an example of how a new challenge strained resources: The administration moved to ship free tests to Americans at a cost of billions as shortfalls mounted. If Congress doesn't allocate more funding, the US could see similar shortfalls again, they said.

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Through the American Rescue Plan, the US put US$47.8 billion toward testing and mitigation strategies; US$16 billion toward procuring medical countermeasures like drugs and vaccines as well as expanding the domestic supply chain for medical tools; US$8.5 billion to rural health providers and suppliers; and more than US$8 billion to the Centers for Disease Control and Prevention, according to the HHS document dated Feb 15.

New US coronavirus cases and hospitalisations have fallen sharply from highs driven by the Omicron surge. Rochelle Walensky, director of the CDC, has said the agency is preparing new guidance on easing measures, such as mask mandates.

Funds sought

Of the overarching US$80.6 billion, US$70.4 billion has been spent or obligated and US$10.2 billion is currently allocated or set aside. None of the money is unallocated, the HHS document shows.

Earlier this week, Biden administration officials told lawmakers that HHS plans to seek US$30 billion in new spending to combat the Covid-19 pandemic in conjunction with a US$1.5 trillion government funding package lawmakers want to complete by Mar 11.

The new funding would be used to procure treatments, pediatric vaccines and variant-specific vaccines, according to a separate HHS document. The money would also be used to sustain testing capacity, develop tests that can distinguish between future variants and provide free testing to the uninsured.

"Resources from the Rescue Plan and previous Covid-response bills have enabled us to respond forcefully to the Delta and Omicron surges," White House Press Secretary Jen Psaki said this week. "And what we're trying to do now is stay ahead and stay in contact with Congress about what those needs might look like." BLOOMBERG