Two years after Congress authorized a hugely expensive bailout of state and local governments as part of a COVID-era emergency spending bill, most of the money still hadn’t been spent.
Perhaps the bailout wasn’t even needed in the first place?
In a new report, the Government Accountability Office (GAO) found that states (including Washington, D.C.) had spent just 45 percent of the funding they had received through the Coronavirus State and Local Fiscal Recovery Funds program, a $350 billion line item within the $2 trillion American Rescue Plan Act (ARPA), which passed in March 2021. Local governments had reported spending just 38 percent of their funds received through the same program.
Those figures are based on mandatory reports filed quarterly with the Treasury and reflect spending through the end of March 2023, two years after the bailout was approved by Congress.
“The new GAO study confirms that the ARPA spending was not needed,” Chris Edwards, chair of fiscal studies at the Cato Institute, tells Reason. “By the fall of 2020, it was clear that the states were in good fiscal shape and not facing Armageddon as many policymakers were claiming. They did not need federal handouts.”
Hellbound and Down 