How Covid Relief Bills Just Filled Basic Funding Issues
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Good point here by Kuttner–what the Covid relief bills did in part was do the basic funding of the government and important projects any decent government should do. Now that funding has gone away. He suggests Biden should run on this; I am less sure that campaigning around issues like this would matter in the face of such facts among the voters such as Biden is why Roe was overturned and also Biden caused Covid and also Biden is old. I mean, it’s the American public, so even the most cursory understanding of basic facts is a bridge too far. However, why not campaign on it? At least it would be the right thing, always a good reason to do something.
In 2020 and 2021, under Presidents Trump and Biden, Congress passed more than $5 trillion in COVID relief funding in six separate bills. The March 2020 CARES Act alone, at $2.2 trillion totaling about 10 percent of one year’s GDP, was the largest non-wartime federal stimulus ever.
Without that funding, unemployment in the COVID recession would have easily reached 20 percent, as the economy spiraled into a 1930s-style self-deepening depression. Entire industries, such as airlines and restaurants, would have collapsed.
The COVID stimulus, which dwarfed the $831 billion stimulus approved under President Obama in 2009 (now widely acknowledged to be inadequate), is a good illustration of government spending sufficient sums to avert an economic disaster. But if you take a good look at where that money went, much of it was money needed for long-deferred, everyday public needs. And 2024 is the year when a lot of that money runs out.
For instance, under the Elementary and Secondary School Emergency Relief (ESSER) Fund, the nation’s schools got $190 billion. As that money is exhausted, public schools face a massive teacher shortage, deferred maintenance expenses, and a fiscal cliff. Philadelphia has a budget gap of $407 million. New York’s is at least $700 million. Across the country, there are potential teacher layoffs and program cuts.
COVID relief also provided funding of $16 billion for public-transit systems and Amtrak. After decades of chronic underfunding and operating deficits, that emergency money was a godsend.
The pandemic sent many transit agencies into a death spiral. Reduced ridership meant reduced income from fares, but increasing fares only reduced ridership further. This downward spiral continues, as the federal funds are depleted.
Deferred maintenance and unreliable service also pushed more riders into Uber. Likewise, more people working at home. In California, the relatively modern and efficient Bay Area Rapid Transit system has only 43 percent of its pre-pandemic riders. New Jersey’s state system faces a $1 billion budget shortfall by 2026. In Boston, where the antiquated subway and trolley system dates to the 19th century, the budget shortfall for the coming fiscal year, which begins July 1, is projected at between $567 million and $652 million.
COVID relief under the Families First Coronavirus Response Act included a temporary boost to the federal share of Medicaid costs. In exchange, states had to maintain continuous coverage, even if an enrollee’s income status changed. Now, states are disenrolling people who no longer qualify, and national enrollment will decline by 8.6 percent in 2024.
It would be nice if we lived in a country where the government could help take care of basic human needs outside of a pandemic, but I would also like a pony.