WASHINGTON — General Joseph F. Dunford Jr., the top choice of congressional leaders to chair a bipartisan coronavirus oversight commission, has taken himself out of the running for the post, the latest setback in Congress’s efforts to keep tabs on the distribution of hundreds of billions of dollars of federal pandemic aid.
The commission has been leaderless since its creation in April, as Republicans and Democrats have failed to agree on a chairman. In recent weeks, General Dunford, the former chairman of the Joint Chiefs of Staff, had emerged as the clear favorite of Speaker Nancy Pelosi, Democrat of California, and Senator Mitch McConnell, Republican of Kentucky and the majority leader, to lead the panel, and was going through the final stages of vetting for the job.
His decision to withdraw, confirmed on Tuesday by friends and other people familiar with the situation who insisted on anonymity to discuss the situation, leaves the committee without a driving force even as Congress prepares to debate another round of government assistance amid a worsening pandemic.
“I’m very disappointed,” said Representative Donna E. Shalala, Democrat of Florida and one of the panel’s four members. “We need a chair, and we need to hire staff.”
The five-member Congressional Oversight Commission, created by the stimulus law enacted in April, is tasked with monitoring $500 billion in bailout money.
Democrats insisted on adding multiple layers of oversight to the package — even holding up its passage to demand stricter accountability measures — saying that the Trump administration could not be trusted to administer the aid without monitoring by Congress. But its work has been hampered by a lack of leadership.
The commission has thus far produced two reports and is about to release a third. Its first report in May concluded that the Treasury Department had disbursed only $37.5 billion of the funding at the time.
In June, the commission wrote that the way that the Treasury Department and the Federal Reserve was using the bailout money had benefited larger companies, but there was “less evidence” of a positive impact for “small and mid-sized businesses and state and local governments” — noting that the Municipal Liquidity Facility had by that point supported only one state: Illinois.
Still, without a chair and staff, it has been difficult for the panel to provide ample oversight and hold hearings investigating the Trump administration’s handling of the money.
“We’ve all been working together,” Ms. Shalala said of the commissioners, two of whom were named by Democrats and two by Republicans. “We’ve been producing first-class reports. But it’s killing us. It’s hard to do hearings without staff.”
For months, lawmakers and outside groups have prodded Ms. Pelosi and Mr. McConnell to quickly reach a compromise and choose a chair for the committee. Along with General Dunford, Sheila C. Bair, a former chairwoman of the Federal Deposit Insurance Corporation, has also been floated as a potential chair.
Filling the job has been a particular challenge given the glaringly partisan nature of the political debate around the coronavirus and the Trump administration’s response, which has made it difficult for Democratic and Republican congressional leaders to find a willing candidate upon whom they can agree.
Further deepening the challenge are senate ethics rules that bar from the position anyone employed for more than 90 days in the current calendar year or earning more than $25,000 from serving as an officer of a public company . The pay for commission members who are not federal employees is prorated based on annual pay of around $219,000, according to the stimulus law. One of the people familiar with the situation said that General Dunford had withdrawn because he had determined that service on the board was not compatible with his other commitments.
Last month, Senator Kamala Harris and Representative Katie Porter, both Democrats of California, sent a letter to legislative leaders urging greater oversight of how the Trump administration was handling billions of dollars in relief funds. They argued the Trump administration was dragging its feet on distributing the money, and should be subject to tough questioning from the body.
“Every dollar that is not spent in the direct service of the American people, through programs like stimulus payments and expanded unemployment benefits, must be accounted for, and every decision as to how those dollars are spent must be scrutinized,” Ms. Harris and Ms. Porter wrote.
Such concerns were also raised during a recent hearing of the Congressional Progressive Caucus.
“The absence of a chair is a crippling deficiency,” said Damon A. Silvers, policy director at the AFL-CIO, told lawmakers.
As Congress enters into a fresh round of negotiations about providing additional stimulus funding, some are increasingly worried about deficiencies in the $2.2 trillion stimulus package — and a lack of oversight of where the money has gone. The measure was drafted hastily in March at a time when lawmakers in both parties were eager to quickly pass proposals that could promptly inject money into the sputtering economy. But some lawmakers and experts now argue that the rush by Congress yielded a bill that in some cases did not work as intended, and they say that more needs to be done to make sure the funding — and any future aid — is not wasted.
Bharat Ramamurti, a member of the oversight commission and former economic adviser to Senator Elizabeth Warren, Democrat of Massachusetts, said the last round of stimulus funding had helped “big corporations and the owners of financial assets, but the Treasury and the Fed programs have not provided much help to mid-sized companies and the state and local governments.”
Mr. Ramamurti said the Trump administration is only partly responsible for the disparity.
“Part of the blame goes to the design of the program,” Mr. Ramamurti said, noting that Congress is also partly at fault for agreeing to put the Federal Reserve in charge of bailout money.
He said he was “pretty proud of the work the commission has done without a chairman,” but added that a leader was necessary if the panel was going to undertake “in-depth analysis of these programs.”
Republicans on the panel have been far less critical.
Representative French Hill of Arkansas said the stimulus package had helped stabilize the economy, adding that he was not particularly concerned about the billions of dollars sitting unused in the stabilization fund.
“The Congress and the executive branch have to be commended for rapidly pulling together bills to attack the virus and try to get the economy back to full capacity,” Mr. Hill said. “There were modest delays, but it was well-received in the country, and very helpful given the impact of public-health shutdowns of business activities around the country.”
Helene Cooper and Emily Cochrane contributed reporting.
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