Lawmakers Should Enact Long-Delayed COVID Relief and Government Funding Deal
For Immediate Release
Congressional leaders over the weekend reached a bipartisan agreement on legislation to fund the government through the rest of fiscal year 2021, provide roughly $900 billion of COVID relief, and enact other measures. The legislation will prevent a government shutdown and provide important funding for vaccine distribution, unemployment insurance, rebates to households, aid for schools, and support for struggling small businesses. We recently estimated the COVID relief plan will boost economic output enough to close the 2021 output gap – though the gains would be spread over time. However, the package took too long to enact and includes too many extraneous measures.
Below is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
With coronavirus vaccines being administered as virus cases are spiking, there is light at the end of the pandemic tunnel – but still months of darkness ahead. This COVID relief package can make a big difference in helping households and businesses get through the winter to a time when the country can begin to resume normal activity.
The CARES Act went a long way to propping up personal incomes and small business cash flow, but most of those resources expired some time ago and the rest are about to end. This package will help the country get through the last, most difficult phase of the pandemic, and help support the economic recovery that follows. It also funds the government for the next 9 months, preventing what could have been a devastating government shutdown amidst a pandemic.
That being said, this process took far too long. We should have funded the government before the beginning of the fiscal year on October 1, and we should have passed economic relief before that. The time wasted on political bickering cost jobs and it may have cost lives.
It’s also sad that to get agreement on this vital legislation, politicians had to add extraneous measures like wasteful tax extenders, clean energy tax credits, and a 100 percent tax deduction for business meals.
While a crisis like this is exactly the right time for the government to borrow, these unnecessary political pet projects waste vital emergency funds and could undermine support for crisis response efforts in the future.
It’s also important to recognize that continued borrowing, necessary as it is, will add to our near- and long-term debt challenges. The federal debt recently breached the size of the economy for the first and only time outside of World War II. Once the economy recovers, corrective actions will be needed to slow debt growth and avoid the looming insolvency of at least four major trust funds.
Despite its flaws, we need Congress to pass and President to sign this legislation without any brinksmanship, so we can get this fiscal aid out the door as soon as possible and begin conversations about what to do next.
You can read more about the details of the COVID relief bill in our blog posted here.
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