Saturday, February 27, 2021

GOP's False Claim of What Happened to Unspent $1 Trillion


Republicans Opposed to President Biden’s Economic Relief Proposal have settled on a Central line of Attack: Congress shouldn’t spend more Money when $1 Trillion in Aid allocated Last year hasn't even been doled out. It’s a Criticism meant to Underscore their Argument that the Resurgent U.S. Economy doesn’t need another Giant Influx of Cash, and certainly not the $1.9 Trillion Package that Biden is seeking and the House Passed today.

What they don't tell you is that money is already spent, but doled out over time to for: Unemployed Americans, Small Businesses, Cities, and Schools. It’s clear that they and the Broader Economy require More. the $1 Trillion has been Assigned to various Programs that were designed to be Distributeed over an Extended Period of Time:

- Enhanced Unemployment Insurance Benefits are sent out Weekly.

- Paycheck Protection Program and other Small Business Aid is Supplied as Employers Apply for them.

- Enhanced Federal Medicaid Matching Funds are provided to States on a Regular Basis as long as the Public Health Emergency remains in place.

- Rebates and Tax Breaks is doled out after Americans File their Taxes.

Lawmakers could have a real Discussion over Substantive Aspects of the New Plan, such as the Size of the Stimulus Checks or Who should Receive them. But the Unspent $1 Trillion is simply a Reflection of how that Relief Packages was Designed.

Congress doesn’t Legislate Once-a-Month for the Bills coming up for the Next Month. They do Annual Budgeting with Supplementals when needed..

What should be Reviewed is, if there is an Overlap of an Existing Program and if it needs to be Extended over the Current Period it now Covers.

Concern about the Size of the New Package has become a Flashpoint in the Debate especially amid New Economic Projections that suggest Significant Growth this year.

The latest Forecast from the Nonpartisan Congressional Budget Office shows the Economy Returning to Pre-Pandemic Levels this year and reaching Growth Levels of 4.6% without Significant New Relief Measures. When factoring in an expected Trillions in Fiscal Relief, some Economists Forecast a 6.8 % Growth Rate for 2021, which would be the Highest since the Reagan era.

Many Economists argue that despite those Forecasts, there is still more work to do. Federal Reserve Chair, Jerome Powell, cautioned Lawmakers in a pair of Congressional Appearances this week Not to Declare Victory on the Economy too Early, warning that the Job is Not done.

Some Economist say even taking into account Unspent Federal Money, Excess Personal Savings, and the Rollout of Coronavirus Vaccines, another $2 Trillion in Fiscal Stimulus is the Appropriate Amount to get the U.S. Economy back to Full Employment by the Middle of Next Year.

One area of particular Concern to some GOP Lawmakers and other Critics of the Plan is in Funding for State and Local Governments. Biden’s Plan would send an Additional $350 Billion to States, Cities, and Localities, adding onto $150 Billion Passed early last year. Republican Members of the House Ways and Means Committee, this week, Published a Report saying that nearly One-Third of that Original Money remains Unspent, and some States are facing a Significant Budget Surplus, as high as $15 Billion in California.

The Risk in sending too much Money to States that Don’t Need it, is if Governors or Local Officials use it as an Opportunity to Cut Taxes for example, and there’s No easy Formula to Allocate Aid only for States that are Hurting the most. But those Closely Tracking this area argue that while States are doing Better than they had Originally expected, they are still Not Doing Well.

The National Association of State Budget Officers says States on Average have Allocated 97% of their Initial round of Funding and spent 77% of it, Contradicting the Ways and Means Numbers.

Other Experts note that Federal Restrictions made it Hard for State Officials to Spend the Money more Quickly than they have.

More broadly, as Biden Administration Officials say, many Economists feel the Risk of doing too Little to Help the Economy right now is far Greater than the Risk of Spending too much, even when $1 trillion in Aid is still on its way out.










NYC Wins When Everyone Can Vote! Michael H. Drucker


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