Doing too little in this moment of crisis will come back to haunt the U.S. economy
The $1.9 trillion American Rescue Plan (ARP) is essential to a robust and equitable recovery. The risk of doing too little is far greater than the risk of doing too much, and the American Rescue Plan meets the scale of the crisis.
The overall size and components of the ARP have been carefully studied and considered. Given the balance of risks facing the economy and the danger of delay, passing the plan at its current scale and composition is the most prudent thing policymakers can do to ensure a rapid and fair recovery. Clearly, this is necessary.
As the Senate debates what belongs in the final relief bill this week, policymakers must not shortchange aid to state and local governments, which is essential to a robust recovery. While projected state and local revenue shortfalls are shrinking from the horrifyingly large forecasts of last year, fiscal stresses remain intense, driven by demands on state and local spending that have increased because the COVID-19 economic pain has been concentrated among low-wage workers. This state and local aid is the best and most immediate way to finance public investments in education and safety net programs. Scaling back this aid would make our economy, and the people in it, worse off. Further, we should extend pandemic unemployment provisions to October 3 so relief does not expire in August while Congress is in recess.