Thursday, May 23, 2024

Group: Louisiana has spent $47 billion in COVID relief funding

by BIZ Magazine
LOuisiana-money

By William Patrick | The Center Square

Louisiana has spent $47 billion in federal COVID-19 relief funding, according to a leading pandemic fiscal watchdog.

The spending dwarfs the recently passed $38 billion state operating budget and doesn’t include roughly $10 billion in unspent allotted funds, mostly stemming from state and local aid programs.

The vast sum, however, is relatively modest with respect to the trillions of dollars in taxpayer-funded federal support that began last year – almost of all of which has been tracked by the nonpartisan Committee for a Responsible Federal Budget.

“With such large commitments, the public deserves to know how their dollars are being spent,” the group says on its follow-the-money website, “COVIDmoneytracker.org.”

The site includes every significant government action relating to the public health emergency, the group says. It also organizes financial data into spreadsheets, tables, graphs and interactive formats to show “how much has been disbursed (or paid back) and to whom.”

So far, Congress has passed $5.9 trillion in pandemic relief legislation, the Trump and Biden administrations have approved $900 million in administrative spending and the Federal Reserve has fulfilled about half of its pledged $6.5 trillion.

The Committee for a Responsible Federal Budget performed the same fiscal watchdog role during the 2008-2010 financial crisis, which policy analyst Mike Farquharson said was significantly different than the current COVID-19 crisis.

“If you compare it to the Great Recession, spending is about twice as large as a percentage of GDP,” he said.

Farquharson added that the coronavirus recession was self-induced, caused millions more unemployed workers than the 2008-2010 recession and lasted only two months officially.

“It did help to boost personal income,” he said, referring to unemployment insurance benefits including the supplemental weekly federal payments on top of state benefits. As workers lost their jobs and businesses shuttered during strict stay-at-home orders last year, employment assistance was vital to millions of vulnerable families.

According to spending data, Louisiana has spent all $9 billion of allotted federal safety net aid, which includes both food and jobless income support.

Farquharson noted that initial CARES Act unemployment payments were so generous that “more than half of recipients (nationwide) were making more than 100% of former wages.”

Federal unemployment assistance will expire in Louisiana at the end of the month as part of a compromise agreement between Democratic Gov. John Bel Edwards and the GOP-controlled state legislature.

Edwards was the first Democratic governor to agree to end the supplemental benefits early – they expire in September nationally – though he also brokered a modest increase in state unemployment assistance.

Farquharson further explained that while there are labor shortages in the form of unfilled jobs, it’s premature to conclude that government COVID-19 benefits are to blame, though “there’s a lot of anecdotal evidence.” He added, “It’s difficult to determine causal effects; it’s much harder than it might seem.”

Louisiana’s largest pandemic allotment came from the federal Loan and Grant Program, which included $15 billion in business aid, mostly through the Paycheck Protection Program and Economic Injury Disaster Loan Advance program.

Direct-payment stimulus checks have totaled $12 billion in Louisiana, while elementary and secondary schools have received $4 billion and Medicaid $1 billion.

Nationally, the money-tracker website lists $500 billion in “extraneous measures” or non-pandemic relief items sandwiched into congressional pandemic spending bills.

The nationwide allotments include $81 billion for pension bailouts, $56 billion for the Affordable Care Act or Obamacare, $30 billion for unrelated federal agency appropriations and another $38 billion in selective spending.

“We were in support of the CARES Act [approved in March 2020] and some of the early bills because of the scale of the crisis,” Farquharson said. “As time went on, we’ve been more critical of some legislation, like the American Rescue Plan. It certainly could have been pared back.”

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