President-Elect Biden unveiled his nearly $2 Trillion COIVD relief plan on Thursday and already out of the gate we are packing it full of pork for state and local governments that might not need the assistance.
From the New York Times:
Mr. Biden’s plan would provide $440 billion in help to communities, according to the administration, in addition to the funds for school reopening. The relief plan would entail billions in grants and loan programs for small businesses (how those would work is not entirely clear), and $350 billion in emergency funding for state, local and territorial governments.
State and local governments have had revenues decline less as a whole than once anticipated, but have taken an uneven financial hit from the pandemic. They have significantly reduced payrolls, which is concerning because they employ about 13 percent of America’s workers.
So, nearly $1 Trillion are going to state and local governments that might have been impacted by the economic hardships of lockdowns due to the virus. However, is that really the case? Are the states in such desperate need of assistance?
Well, it appears that as the new years has hit the states are starting to realize their finanical situation is not as bad as they first predicted.
From the Associated Press:
Projected tax revenues in Michigan’s two major accounts will be $2.1 billion higher than previously anticipated over two years, driven by increased federal unemployment benefits and consumers’ online purchases in the coronavirus pandemic.
Economists in the Legislature and Gov. Gretchen Whitmer’s administration agreed Friday to economic and fiscal forecasts.
For the current budget year, revenues in the general and school funds are projected to total $24.3 billion — down $505 million, or 2%, from last year but $1.2 billion above an August estimate. The combined revenues for the 2021-22 fiscal year are $25.3 billion, up $1 billion, or 4.3%, from this year. It is $875 million higher than a prior projection, which would nearly wipe clear a potential $1 billion shortfall that had been suggested months ago.
So, if a state large manufacturing state like Michigan is going to be well above predictions then why does the federal government need to dish out so much money and rack up the debt when it is not necessary?
As former Congressman Paul Mitchell points out “So why does the Biden COVID Relief plan have nearly $1T in federal $$ for State/local aid. Oh yeah – public employee unions demanded it.”
There is your answer. As one pork filled administration leaves office another one just swoops right in and continues down the same trajectory of financial insecurity.
Categories: Joe Biden