(Bloomberg) -- The US Treasury Department said it will have to scale down the rollout of Covid-19 stimulus under the American Rescue Plan Act if Congress doesn’t allow it to tap into funds from other programs to help with costs.

Treasury officials have asked Congress to let them use administrative funds appropriated for other pandemic relief programs, like the Coronavirus Aid, Relief, and Economic Security Act, to help support several key programs in the $1.9 trillion ARPA, according to a letter obtained by Bloomberg News.  

“Treasury has been working with Congress to seek flexibility in how administrative funds can be used across programs, which would preserve our ability to provide support across these programs without affecting any of the Department’s operations,” the letter, which was sent to more than 30,000 ARPA grant recipients on Friday, said. “These changes would not require any additional funds to be appropriated by Congress, but instead would permit Treasury to repurpose some funds from other pandemic programs that are in later stage of implementation to American Rescue Plan programs with significant outstanding needs.”

If Congress does not grant the agency’s request, Treasury will reduce basic outreach, reporting and compliance efforts for programs including emergency rental assistance, the homeowner assistance fund, the local assistance and tribal consistency fund and $350 billion in state and local fiscal recovery funds. 

Those reductions would include closing call centers, curtailing email responses to grant recipients and enacting a federal hiring freeze on support staff as soon as October, a Treasury official said.

“Treasury is facing constraints that will put our ability to continue this level of support to recipients at risk -- with the greatest impact likely felt by the smallest jurisdictions and Tribal governments, who often rely on more in-depth engagement with Treasury,” according to the letter. “Available funding is insufficient to allow Treasury to maintain the current levels of administrative support.”

ARPA was passed in March 2021. According to the letter, the program has disbursed more than 7 million emergency rental assistance payments and supported more than 50,000 projects by state, local and tribal governments. State-level recipients have used ARPA money for operations, water infrastructure and unemployment trust funds, among other initiatives documented by the National Conference of State Legislatures.

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