The case for more federal aid

The case for more federal aid

The critical services that state and local governments provide are more important than ever as communities struggle against the Covid-19 recession. But with revenue collections waning, many state and local authorities are considering laying off public servants. More federal aid is needed to help states and locals avoid these cuts. As David Cooper of the Economic Policy Institute explains, cutting vital government services is a recipe for deeper and longer economic pain: the states that minimized public-sector job cuts during the Great Recession recovered faster than those that did not.

The best thing that lawmakers can do to bolster an economic recovery—whenever that is possible—is to preserve the critical public services that keep local economies running. Congress must send aid to state and local governments to ease the budget shortfall that states and localities are facing because of the pandemic. At the same time, state lawmakers should seize this moment to reform tax systems whose regressive designs in many states exacerbate inequality, which—on its own—hinders growth. State lawmakers should establish new, progressive sources of revenue that can support strong public services, make state tax systems more equitable, and are better able to recover from future recessions.

 

Is America a “failed state”?
More than 100,000 Americans have now died from coronavirus, and that number is almost certainly an undercount. Historians will spend decades combing through the policy failures that brought us to this point. But George Packer, writing in The Atlantic, says the pandemic is merely the culmination of a governing crisis that has been brewing for decades:

All of the lasting pain was felt in the middle and at the bottom, by Americans who had taken on debt and lost their jobs, homes, and retirement savings. Many of them never recovered, and young people who came of age in the Great Recession are doomed to be poorer than their parents. Inequality—the fundamental, relentless force in American life since the late 1970s—grew worse.

 

Invest in child care
America’s economy cannot fully re-open until parents are able to find care for young children. Yet many child care providers have been forced out of business by the Covid-19 recession, while providers that have opened their doors now face higher costs associated with more stringent sanitation requirements. Now, members of Congress from both parties are proposing to do for child-care providers what they have done for banks and automakers in the past: bail them out. The New York Times’ Claire Cain Miller reports:  

Though many rich countries heavily subsidize early care and education, the United States has long resisted doing so. Lockdowns have shown what happens when child care and education are financed by parents instead of the government. Elementary and high schools are publicly financed, so no one doubts that schools and teachers will still be there when the country fully reopens. There is no such assurance for child care.

 

Sayonara to a secrecy bill
A bill that would have prevented the public from knowing key information about companies that receive tax breaks from the government was shot down Wednesday in a House committee. The legislation was sought by the Baton Rouge Area Chamber, but faced strong opposition from good government groups and press advocates who said it was written too broadly. Nola.com | The Advocate’s Sam Karlin reports

Scott Sternberg, general counsel for the Louisiana Press Association and attorney for the Advocate and Times Picayune, said information like social security numbers is already exempt from public records law. And while the bill did not cover “majority shareholders,” Sternberg noted companies could easily restructure their ownership to hide who owns the companies receiving tax dollars. “The press and the people are not interested in people’s social security numbers,” Sternberg said. “We just want to know if the governor’s brother is on the payroll.”

 

Number of the Day
1 in 4 – Proportion of U.S. workers that filed for unemployment benefits since the pandemic began. (Source: The New York Times)