The carefully bi-partisan House Problem-Solvers Caucus (25 D's and 25 R's) led by two Northeastern Members - Josh Gottheimer (D-NJ) and Tom Reed (R-NY) - have released a $1.5 Trillion next round stimulus bill "framework" including $500 Billion for state and local government, the same amount which would be provided by the SMART legislation introduced by bi-partisan sponsorship duos in the Senate (Menendez and Cassidy) and the House (Sherrill and King).
That could be a coincidence but I don't believe in coincidences, particularly when many of the same people who make up the Problem Solvers Caucus have also signed on as House cosponsors of the the SMART legislation. Starting last spring, $500 Billion is also an amount that most sober public finance analysts have seemed to agree is within the ball-park of what the states and localities need to cover tax and fee revenue losses projected for FY 2020 and 2021. Are we witnessing the return of evidence-based legislating and appropriating, as we saw in the spring with CARES, etc.? The next few days may tell.
Here's the Problem Solvers Caucus rationale for - and breakdown of - the $500 Billion (or actually $630 Billion if we give full credit to the first "solution" element):
"Problem: State and local governments have been severely impacted by covid-19 - both by incremental and unplanned direct costs, and by the loss of tax and fee revenue integral to the provision of services and payment of employees. Funds cannot supplant any liability that existed prior to the pandemic."
"Solution: Allow $130 billion remaining from CARES Act for flexible use on documented past state & local covid expenses, [provide]$130 billion in new money for documented, future state & local covid expenses (through 2021) [Provide] $120.3 billion in new money for documented local general revenue shortfalls (through 2021), and [Provide] $250 billion in new money for documented state general revenue shortfalls (through 2021)."
The proposal also calls for both new stimulus money and the reallocation of previously appropriated “CARES Act” funding, and allocates resources to the following other key categories:
Testing & Healthcare ($100B)
Direct Assistance to Individuals & Families ($316B)
Unemployment Assistance ($120B)
Small Business & Non-profit Support ($290B
School & Child Care ($145B)
Election Support ($400B)
Broadband, Agriculture, USPS, & Census ($52B)
Worker & Liability Protections
"Automatic Boosters & Reducers"
All this would be just the fiscal policy that the macro-economy's Doctor Jay Powell has been trying to prescribe for months now
Comments