Fact check: What federal programs (Treasury, FEMA, ARPA) can states use instead of a 'bailout' and did these states apply in 2023–2024?

1. What advocates mean when they say “use federal programs instead of a bailout” — the claim unpacked

Advocates arguing against a direct federal “bailout” of states point to existing, sizable federal pots meant to cover pandemic and disaster impacts. The central federal alternative is the American Rescue Plan’s SLFRF, a $350 billion program designed to replace lost public sector revenue, respond to public-health and economic harms, and fund capital projects like water, sewer, and broadband infrastructure ^[1]. Other claimed alternatives include USDA supplemental disaster assistance to agriculture and FEMA or IRS disaster authorities that provide targeted relief and tax extensions for declared disaster areas ^{[4] [6]}. The core claim is that these programs provide legally authorized, targeted pathways to address revenue shortfalls or sector-specific damage without a new ad hoc federal transfer labeled a “bailout” ^{[3] [5]}.

2. The Treasury ARPA/SLFRF program: scope, flexibility, and documented state use

The ARPA SLFRF program gives states broad discretion to replace lost revenue and invest in recovery, with a Treasury final rule clarifying eligible capital expenditures and expanded public-sector hiring options; recipients have used funds for education, workforce training, housing, broadband, and infrastructure ^{[1] [2] [3]}. Tracking databases compiled by legislative organizations document diverse state choices: some directed major shares to infrastructure and broadband, others used funds for direct relief or revenue replacement ^[3]. That flexibility means SLFRF could functionally serve many needs that opponents frame as requiring a bailout, but timing, one-time nature, and statutory restrictions—including the sunset of allowed uses—limit SLFRF as a recurring substitute for structural budget shortfalls ^{[1] [3]}.

3. Disaster, agriculture, and tax tools: narrower but active alternatives in 2023–2024

USDA supplemental disaster assistance and IRS disaster-relief provisions are targeted mechanisms for specific harms: the USDA assistance program addresses farm and livestock losses, and the IRS provides filing and loss-reporting relief for federally declared disaster areas ^{[4] [6]}. The analyses indicate that in 2023–2024 states including Florida, Georgia, North Carolina, South Carolina, Tennessee, and Virginia applied for USDA general block grants tied to disaster recovery, showing these tools were actively deployed as alternatives to broader state fiscal support ^[4]. These programs are more limited in scope compared with SLFRF; they are effective when distress is tied to disasters or agriculture rather than systemic revenue shortfalls.

4. Evidence for whether states “applied” in 2023–2024 — mixed picture and program-by-program differences

Records show that states did engage federal programs in 2023–2024, but engagement differed by program and state priorities. Several states pursued USDA disaster block grants in 2023–2024, demonstrating uptake of sector-specific assistance ^[4]. SLFRF allocations were largely distributed earlier, and states continued to obligate and spend those ARPA funds through 2023 and 2024 on infrastructure, public health, and revenue-replacement projects tracked in legislative databases and Treasury reporting ^{[2] [3]}. The available analyses document continued ARPA implementation rather than new ARPA applications in that window, and they show that use of federal alternatives is not uniform—some states relied heavily on SLFRF while others leaned on disaster-specific programs or tax relief tools ^{[3] [5]}.

5. Contrasting perspectives, political overtones, and what’s left out of the debate

Supporters of using these federal programs stress that authorized funds are large, legally structured, and targeted, reducing the need for ad hoc bailouts ^{[1] [2]}. Critics argue that program rules, one-time funding, and political disagreements over eligible uses mean federal alternatives may not substitute for recurring state budget needs. Tracking databases and program rules show this tension: SLFRF is flexible but finite, USDA and IRS tools are narrow in eligibility, and no single program is a universal solution for structural fiscal shortfalls ^{[3] [4] [6]}. Political agendas are evident: proponents emphasize infrastructure and recovery achievements while opponents highlight restrictions and long-term fiscal gaps left unaddressed by one-time federal infusions.

6. Bottom line — what the facts support and what policymakers should watch

The evidence supports three clear facts: ARPA/SLFRF provided the primary federal alternative to a bailout and was actively spent through 2023–2024, USDA disaster grants were applied for by multiple states as targeted relief in 2023–2024, and IRS disaster tax relief remains a narrow but available tool for declared disasters ^{[1] [2] [3] [4] [6]}. Policymakers should recognize that these programs can address many acute needs but are not designed to replace ongoing structural revenue shortfalls; transparency in how states allocate one-time funds and continued tracking by databases will determine whether they functionally reduced calls for new bailouts ^{[3] [5]}.