The President-elect's latest Covid-relief omnibus appropriation bill proposal is said by the Washington Post in it's piece of a few minutes ago by Erica Warner and Jeff Stein to include more than $400 billion to combat the pandemic directly, including accelerating vaccine deployment and safely reopening most schools within 100 days of passage, along with $350 billion to help state and local governments bridge budget shortfalls.
As I commented in this space in the pre-insurrection phony calm before that continuing storm, the amount of the tax and fee revenue shortfalls actually experienced by the states and localities will probably be significantly less than the $500 billion 2 + year aggregate revenue shortfall projected by most knowledgeable public finance guesstimators when the first wave of the pandemic hit it the spring. Jared Walczak of the usually conservative Tax Foundation has published a fairly detailed projection suggesting that it will be way less than that, in fact.
With most macro-economic sages and decision-makers - including Fed Chairman Jay Powell and Treasury Secretary-designate Janet Yellen - counselling that it's better to stimulate more rather than less to help the country recover fully from the Greater Recession of 2020-2021, (given the nation's experience of sluggish recovery from the Great Recession of 2008-2009 with too little stimulus, including particularly miserly aid to state and local government) - the $350Billion looks to be about right-sized from a macro-economic perspective.
Of course how that amount is proposed to be allocated among states and localities with vastly different shortfalls as measured by % of 2020 budgeted-revenue remains to be seen.
Stay tuned for that debate, which will definitely make way more folks in DC and the State Capitols and local government office wish we had the dearly-departed ACIR still available to guide us to thoughtfully fair and equitable distributional conclusions!
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