Published on March 3, 2021
President Biden has reportedly agreed to modify the covid-19 relief bill under pressure from moderate Senate Democrats, narrowing the eligibility of some upper-middle-income families to receive the $1,400 per person stimulus checks. He could do a lot more to cut this bloated and wasteful package while still providing relief for those who need it.
Grants to state and local governments is one place to look. The measure allocates $350 billion in aid to states, cities and counties, supposedly to address pandemic-created revenue shortfalls. New data, however, shows that state budgets have been much less affected by the pandemic than had been expected, with some even showing an increase in revenue from the year before. Any aid should be predicated on a showing of fiscal need, not an open-ended subsidy. Hundreds of billions of dollars could be shaved from the package by applying this simple test.
The same approach should govern aid to schools. The bill currently includes $170 billion for K-12 schools and higher education, purportedly to enact measures that would enable distance learning or an earlier return to in-person instruction. Nearly $60 billion in previously enacted aid for schools remains unspent, however. Additional funds should not be given until schools or universities have used their previously allocated money, and they should also be predicated on return to 100 percent in-person instruction.
Henry Olsen is a senior fellow at the Ethics and Public Policy Center.