State and local governments must spend all obligated ARPA recovery funds by year-end or return money to Treasury

State and local governments must fully spend all obligated ARPA State and Local Fiscal Recovery Funds by December 31, 2026, or return remaining balances to the Treasury. The Trump administration can't claw back obligated funds — only unspent dollars face return. Hundreds of billions in state and local infrastructure, housing, workforce, and pandemic recovery programs are affected.