Thanks President Biden, but no thanks

May be a cartoon

The gigantic $1.9 trillion stimulus package that has more pork than the swine barn at the WI State Fair has been approved by Congress and was signed into law by President Biden this afternoon.

US President Joe Biden signs the American Rescue Plan on March 11, 2021, in the Oval Office of the White House in Washington, DC.

The following financing is included:

Local government: It would provide $350 billion for states, local governments, territories and tribal governments, along with rental assistance, small business aid and extended unemployment benefits.

Hard to imagine that despite such a huge handout from Uncle Sam that there are governments that actually don’t want the help, or at least question the concept.

In Utah lawmakers are expecting a budget surplus of $1.5 billion from income and sales tax revenue. Does the state need tons of Federal dollars sent their way?

Utah state Senate President Stuart Adams, a Republican, told Stateline, “Everybody can use money, there’s no question about it. But we don’t need it.”

 “Federal lawmakers need to evaluate what the needs actually are,” said Jared Walczak, vice president of state projects with the Center for State Tax Policy at the Tax Foundation, a conservative-leaning think tank based in Washington, D.C. “Because in many cases, the discussions are still proceeding as if we haven’t received new data after the last six months.”

Stateline reports this major piece of information that fuels the argument that the stimulus package is far too beefy:

After most governors last spring ordered nonessential businesses to close to slow the spread of COVID-19, unemployment spiked and state leaders girded themselves for economic collapse and a major budget crisis. Lawmakers began cutting budgets and freezing hiring as they prepared for the worst.

But for most states, the worst-case scenario never played out. On average, state revenues fell 1.8% during April-December 2020 compared with the same period in 2019, the Urban Institute has found.

Still, there certainly have been layoffs and revenue losses in many states. But…

Marc Goldwein, senior vice president and senior policy director of the Committee for a Responsible Federal Budget, a Washington, D.C., nonprofit that studies fiscal policy said, “I think more of what’s happening with these layoffs is states and localities are laying off workers they don’t need during pandemics,” he said, such as custodial staff or school cafeteria workers whose services aren’t necessary when government-run buildings are closed. 

Goldwein also emphasized the package would send states money beyond the $350 billion in direct payments, such as billions of dollars for schools and transit. “It’s substantially more, we think, than states need,” he said.

In Kansas, state Sen. Dinah Sykes, a Democrat and the minority leader said, “As Democrats, we are looking at, how do we fund essential programs, and balance the budget, and get through the pandemic.” Before the package was approved Sykes said any tax cuts that would be included were too expensive and could make future funding difficult for transportation and education.

Utah House Speaker Brad Wilson, a Republican said, “I quite frankly don’t think that the federal government should be bailing out states. I think states should be able to manage their own budgets.” 

One of the major flaws in the package was noted by South Carolina Gov. Henry McMaster, a Republican. “If Congress is going to provide aid to states, it should be on an equitable population basis,” said McMaster.

And as America becomes more vaccinated creating the possibility of a rebounding economy, “State revenue, and local government revenue, has the potential to skyrocket this year,” said Marc Goldwein of the Committee for a Responsible Federal Budget. Which begs the question once more: Why give away the country’s farm?

Read more in Stateline.

One thought on “Thanks President Biden, but no thanks

  1. Pingback: My Most Popular Blogs (03/15/21) | This Just In… From Franklin, WI

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