[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
FROM RECESSION TO RECOVERY: EXAMINING
THE IMPACT OF THE AMERICAN RESCUE
PLAN'S STATE AND LOCAL FISCAL
RECOVERY FUNDS
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HEARING
BEFORE THE
COMMITTEE ON
OVERSIGHT AND REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
MARCH 1, 2022
__________
Serial No. 117-67
__________
Printed for the use of the Committee on Oversight and Reform
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on: govinfo.gov,
oversight.house.gov or
docs.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
47-065 PDF WASHINGTON : 2022
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COMMITTEE ON OVERSIGHT AND REFORM
CAROLYN B. MALONEY, New York, Chairwoman
Eleanor Holmes Norton, District of James Comer, Kentucky, Ranking
Columbia Minority Member
Stephen F. Lynch, Massachusetts Jim Jordan, Ohio
Jim Cooper, Tennessee Virginia Foxx, North Carolina
Gerald E. Connolly, Virginia Jody B. Hice, Georgia
Raja Krishnamoorthi, Illinois Glenn Grothman, Wisconsin
Jamie Raskin, Maryland Michael Cloud, Texas
Ro Khanna, California Bob Gibbs, Ohio
Kweisi Mfume, Maryland Clay Higgins, Louisiana
Alexandria Ocasio-Cortez, New York Ralph Norman, South Carolina
Rashida Tlaib, Michigan Pete Sessions, Texas
Katie Porter, California Fred Keller, Pennsylvania
Cori Bush, Missouri Andy Biggs, Arizona
Shontel M. Brown, Ohio Andrew Clyde, Georgia
Danny K. Davis, Illinois Nancy Mace, South Carolina
Debbie Wasserman Schultz, Florida Scott Franklin, Florida
Peter Welch, Vermont Jake LaTurner, Kansas
Henry C. ``Hank'' Johnson, Jr., Pat Fallon, Texas
Georgia Yvette Herrell, New Mexico
John P. Sarbanes, Maryland Byron Donalds, Florida
Jackie Speier, California Vacancy
Robin L. Kelly, Illinois
Brenda L. Lawrence, Michigan
Mark DeSaulnier, California
Jimmy Gomez, California
Ayanna Pressley, Massachusetts
Russ Anello, Staff Director
Emily Burns, Policy Director
Elisa LaNier, Chief Clerk
Contact Number: 202-225-5051
Mark Marin, Minority Staff Director
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C O N T E N T S
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Page
Hearing held on March 1, 2022.................................... 1
Witnesses
The Honorable J.B. Pritzker, Governor, state of Illinois
Oral Statement............................................... 8
The Honorable Fawn Sharp, President National Congress of American
Indians
Oral Statement............................................... 9
The Honorable Victoria Woodards, Mayor, City of Tacoma,
Washington, First Vice President, National League of Cities
Oral Statement............................................... 11
The Honorable Gary Moore, Judge-Executive Boone County, Kentucky,
Immediate Past President, National Association of Counties
Oral Statement............................................... 12
Dr. Michael Leachman, Vice President for State Fiscal Policy,
Center on Budget and Policy Priorities
Oral Statement............................................... 14
Mr. Marc Joffe (Minority Witness), Senior Policy Analyst, Reason
Foundation
Oral Statement............................................... 15
Opening statements and the prepared statements for the witnesses
are available in the U.S. House of Representatives Repository
at: docs.house.gov.
INDEX OF DOCUMENTS
----------
The documents listed below are available at: docs.house.gov.
* Moody's Analytics Report on Global Fiscal Policy in the
Pandemic; submitted by Chairwoman Maloney.
* MissionSquare Research Institute on Public Sector Workforce;
submitted by Rep. Connolly.
* Mayor Vince Williams's Statement for the Record; submitted by
Rep. Raskin.
* National Conference of State Legislatures Letter; submitted
by Chairwoman Maloney.
* National Conference of State Legislatures Report on Stimulus
Spending; submitted by Chairwoman Maloney.
* National League of Cities Fiscal Report; submitted by
Chairwoman Maloney.
* Questions for the Record: to Dr. Michael Leachman; submitted
by Rep. DeSaulnier.
* Questions for the Record: to The Honorable J.B. Pritzker and
Dr. Michael Leachman; submitted by Rep. Welch.
FROM RECESSION TO RECOVERY: EXAMINING
THE IMPACT OF THE AMERICAN RESCUE
PLAN'S STATE AND LOCAL FISCAL
RECOVERY FUNDS
----------
Tuesday, March 1, 2022
House of Representatives,
Committee on Oversight and Reform,
Washington, D.C.
The committee met, pursuant to notice, at 10:06 a.m., in
room 2154, Rayburn House Office Building, and via Zoom; Hon.
Carolyn Maloney [chairwoman of the committee] presiding.
Present: Representatives Maloney, Norton, Lynch, Connolly,
Krishnamoorthi, Raskin, Khanna, Mfume, Tlaib, Porter, Bush,
Brown, Davis, Wasserman Schultz, Welch, Johnson, Sarbanes,
Kelly, Lawrence, DeSaulnier, Gomez, Pressley, Comer, Foxx,
Hice, Grothman, Cloud, Gibbs, Higgins, Sessions, Keller, Biggs,
Clyde, LaTurner, Herrell, and Donalds.
Chairwoman Maloney. The committee meeting will come to
order.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
I now recognize myself for an opening statement.
Before we begin, I just want to say that our hearts go out
to the Ukrainian people. Russian President Putin personally
provoked this conflict with a peaceful neighbor, and he alone
bears full responsibility for the tragic and bloody
consequences that are unfolding. I am grateful to President
Biden for rallying the world to support the brave people of
Ukraine. As we begin our work today, I want to make clear that
this committee stands with Ukraine as well.
Two years ago, global attention was seized by a different
crisis as the Coronavirus pandemic disrupted life across the
world. Under the last Administration, the American economy
experienced its worst contraction since 1946, and in April
2020, the unemployment rate skyrocketed to almost 15 percent,
the highest rate since the Labor Department began collecting
this data more than 70 years ago. In the months that followed,
hundreds of thousands of Americans died, and millions more
suffered the loss of their family members, jobs, and income.
The country had a decision to make. Faced with a
destructive recession and public health crisis, would we show
the courage necessary to save lives, support communities in
need, and revive our stalled economy? President Biden's answer
was ``yes.'' He proposed the American Rescue Plan on his very
first day in office along with the National Vaccination Program
and direct support for families and small businesses. The plan
included $350 billion in Recovery Funds to States, tribes,
territories, and local governments. I am proud to say that this
committee in a bipartisan way played a key role in designating
and passing these crucial Recovery Funds. We received input
from hundreds of bipartisan stakeholders, including Governors,
tribal leaders, mayors, union, industry leaders, and public
health officials, and we listened to what they had to say.
First, Congress provided aid directly to governments of all
sizes, many of which had been left to fend for themselves
during the previous Administration. Second, rather than a top-
down one-size-fits-all, we ensured the aid was flexible so that
states, and cities, and local governments could invest in the
solutions that fit their communities and priorities. Third, we
ensured the aid would help restore the 1 million public sector
jobs already lost due to the pandemic, including teachers,
healthcare workers, and first responders. Fourth and finally,
this aid was designed to promote an equitable recovery,
ensuring those hit hardest by the pandemic received the help
they deserved. One year later, I am pleased to report that the
American Rescue Plan worked and has put our communities and our
country on the path for a strong recovery from the recession
and public health crisis that began under the previous
Administration.
Adjusted for inflation, America's gross domestic product
rose by 5.7 percent in 2021, far surpassing earlier forecasts.
Last quarter's growth was an impressive seven percent. The
American Rescue Plan has also led to a strong jobs recovery.
Last month, the unemployment rate dropped to four percent, and
that is lower than earlier forecasts predicted for all of 2022.
That means more money in Americans' pockets. Even adjusted for
inflation, Americans' incomes rose by an average of 5.6 percent
in 2021. And those in the lower 50 percent of income
distribution have raised their income at almost double that
rate, helping to make our recovery more equitable. Making sure
economic gains are distributed equitably across income brackets
is one of my top priorities and is the focus of our bill, the
Measuring Real Income Growth Act.
According to independent experts at Moody's Analytics, if
Congress had not passed the American Rescue Plan, the country
could have plunged into a double-dip recession. That would have
meant lower growth and millions more people without jobs. Of
course economies around the world have many challenges in the
last year, including supply chain issues and inflation, which
have been made worse by recent Russian aggression, but the
American Rescue Plan has put America in the best position to
manage these headwinds. In fact, the U.S. was the first Nation
in the G7 group of large, developed economies to reach its pre-
pandemic level of GDP, and our economy has grown at least three
times faster than any other G7 country since the start of the
pandemic. That is twice as much growth as that of all G7
countries combined.
But what matters most is how this law, and especially the
state and local Recovery Funds, are impacting the lives of
Americans every day. In New York City where the virus hit early
and hard, Recovery Funds are supporting the Vaccine for All
Corps, which brings vaccination opportunities to hard-to-reach
populations, while creating entry-level clinical jobs for
disadvantaged populations. The funds have also helped small
businesses survive the pandemic through efforts, like the Open
Restaurants, Open Streets, and Open Storefronts Programs, which
helped save more than 100,000 jobs.
Our witnesses today will share many more stories from
around the country and from the state, tribal, and local
levels. The American Rescue Plan has been transformative in
savings jobs and small businesses, protecting public health,
and promoting an equitable recovery that supports opportunity
for all. The Recovery Funds have helped move our country from a
deep recession to a strong recovery, and today's investments
will strengthen our country for decades to come.
I now recognize the distinguished ranking member, Mr.
Comer, for an opening statement.
And I just want to mention that our bill that we worked on
together in a bipartisan way from the ground up is under
consideration before the U.S. Senate. It passed overwhelmingly
in the House with strong bipartisan support, and we are hopeful
that it will pass the Senate and put our Post Office on a
firmer financial standing going forward to serve the American
people. I want to publicly thank Mr. Comer for his leadership
on that bill. Thank you.
I yield to Mr. Comer.
Mr. Comer. Thank you, Chairwoman Maloney. Thank you for
calling this hearing today. I want to welcome our witnesses
here today, and thank you for your testimony and input,
especially my very good friend for many, many years, Boone
County Judge-Executive Gary Moore. And, Judge Moore, I have to
throw this in. I was in your county Saturday night. I spoke to
the Kentucky Letter Carriers Association, Madam Chair, and gave
them a very positive update on the progress of our bipartisan
bill and what is going on in the Senate. And so I always enjoy
going to Boone County, and it is just amazing the growth that
you continue to experience up there. Very, very impressive.
But, Madam Chair, despite our great bipartisan work and
accomplishments with postal reform which this committee has
legislative jurisdiction over, I must say that I question the
underlying premise of this hearing today. While states and
localities surely appreciate billions of dollars in Federal
aid, what exactly are we doing here? This is certainly not
conducting oversight, and, as you can see, our side of the
aisle, we are passionate and interested about conducting
oversight. The bill Democrats passed might have sent plenty of
money out the door, but they refused to put guardrails in place
to ensure that it was spent well.
Democrats simply threw money out the door like they were
throwing beads off a Mardi Gras float on Fat Tuesday. But
economists across the political spectrum warned sending
trillions of dollars out under the guise of COVID relief--money
well in excess of what was needed--would result in a world-
class hangover, and that is what we have got now in the form of
the highest inflation rates we have seen since the early
1980's. Instead of celebrating Democrats' reckless spending
binge today, we should instead address the many crises and
issues that matter to the American people: inflation, the
origins of the COVID pandemic, the energy crisis, the broken
border, the disastrous withdrawal from Afghanistan, and now the
war in the Ukraine. Sadly, this list continues to grow almost
daily. These are the issues Republicans on the House Oversight
Committee are concerned about.
Yet Democrats think the best use of our time is to give
themselves a pat on the back, a job well done, giving out piles
of cash for anything, any need, real and perceived, needs like
green homes, stimulus payments for illegal immigrants. Yes,
stimulus payments for illegal immigrants. This morning, I spoke
at the Kentucky Farm Bureau meeting at the JW Marriott, and I
had two farmers come up to me and say, is there anything you
can do about these stimulus payments my H-2A workers are
getting? I mean, is that where taxpayer dollars are supposed to
go: stimulus payments for state parks and trails, golf courses,
and the local zoo, and who knows what else? Who knows, because
it is unclear if anybody is keeping track. There is no required
public reporting.
I am sure states and localities can point to projects
important to their communities, and I am sure Democrats will
try to point to such projects in my home state of Kentucky, but
that doesn't make the underlying facts disappear. Congress gave
out trillions of recovery dollars that weren't needed for
recovery, which has led to record-breaking inflation and kicked
the door open for waste, fraud, and abuse. But it seems like
the Oversight strategy is simply to not look. I am confident
that strategy will change in January.
Madam Chair, I yield back.
Chairwoman Maloney. The gentleman yields back, and today's
hearing is very important. It is oversight. It is oversight of
the $350 billion that this committee voted on and sent out to
our communities across the country. We have leaders from
tribes, from cities, from states here to testify on what it
meant in their communities or what problems are still there,
and I think the proof is in the pudding. The facts tell a story
that is very different. We have over 6.6 million new jobs
created since President Biden took office, and, in fact, the
U.S. was the first Nation out of the G7 group of large,
developed economies to reach our pre-pandemic level of GDP, and
our economy has grown at least three times faster than any
other G7 country since the start of the pandemic. And if you
look at that, that is twice as much growth as that of all of
the G7 countries combined. And I have reports from the League
of Cities, and from Moody's, and others that say that the
American Rescue Plan contributed to this.
And I just want to say that I am disappointed that my
Republican colleagues continue to make misleading claims about
the Biden Administration's response to the pandemic and, I
would say, the oversight work of the committee. The truth is
the Select Subcommittee held 14 hearings and briefings last
year. In January, they held a member briefing with top health
officials, including CDC Director Walensky and one of the
witnesses that Republicans have required, and they have another
hearing planned for tomorrow on the impacts of the Coronavirus
on childcare. The Biden Administration has made tremendous
progress in expanding access to vaccines and testing, saving
thousands of lives in the process. We have held numerous
oversight hearings on the F-35, on contracts that were let for
the Coronavirus, reclaiming funds, and we are conducting very,
very vigorous oversight.
So with that, I would like to turn to the distinguished
chairman of the subcommittee on this committee, Mr. Connolly.
Mr. Connolly. Thank you, Madam Chairwoman, and let me join
you in wanting to have this kind of oversight hearing. My
friends on the other side of the aisle want to avoid talking
about things that are uncomfortable. My friend, Mr. Comer--and
I respect him--he and I had an exchange a number of months ago
in which he actually raised the question: why should his
constituents in Kentucky be paying for certain things that
benefited largely other parts of America? But then a tornado
hit your district, and all Americans responded, including this
one, in wanting to provide relief, emergency relief, for people
who were affected by a tragedy because we are all Americans.
A senator of Kentucky, minority leader of the U.S. Senate,
in talking about the plight of local governments at the height
of the pandemic, said, ``Let them file for bankruptcy.'' That
was his ethos. By the way, the fact that constitutions in many
states prohibit that notwithstanding, if local governments had,
in fact, followed Mitch McConnell's advice, the bond market in
the United States would have been destroyed. Services would
have collapsed at the height of the worst pandemic in over 100
years.
Criticism of President Biden is fascinating to listen to if
you want to forget that his predecessor, Donald Trump, was
advocating drinking Clorox as a possible solution to the virus.
We have come a long way. Economically, we have come a long way
because of the investments we have been willing to make with
some Republican support. The bill we passed in March of last
year is one of the most transformative investments in response
to this pandemic we could have made. We cut child poverty in
half. And instead of having an economic collapse as was being
predicted at the height of the pandemic, we had, as the
chairwoman said, robust growth, the most robust growth of any
industrialized nation in the world during this pandemic. We had
a 5.7 percent GDP growth rate last year. We haven't had that
since 1984. We had the lowest number of unemployment filings
the last quarter of last year since 1969. We had, as the
chairwoman said, the largest number of job growth in the
history of America in the first year of any President.
I am proud of the investments we made, but I, like the
chairwoman, and I hope all members of this committee, want to
know what did we get right and what did we get wrong. How can
we learn best lessons so that we do it even better as we move
forward? So I am glad we are having this hearing, Madam
Chairwoman. I thank you for convening it, and I would hope we
will focus on the subject at hand instead of political
gimmickry and posturing that helps nobody as we are trying to
come out of this pandemic and continue the economic growth
pattern that President Biden has overseen.
Thank you.
Mr. Comer. Point of order, Madam Chair.
Chairwoman Maloney. The gentleman is recognized.
Mr. Comer. I just want to make the point, and Mr. Connolly
knows this. There is a difference between emergency relief
funding, which is a function of the government, and unnecessary
pork spending. I yield back.
Mr. Connolly. Madam Chairwoman?
Chairwoman Maloney. The gentleman----
Mr. Connolly. I think a pandemic is an emergency.
Chairwoman Maloney. I agree with the gentleman, but we have
so many important witnesses that have flown in from all over
the country, including Kentucky, so I want to hear what they
have to say. So I hope we can focus on the topic before us. I
thank Mr. Connolly for his opening statement, and I now
recognize Mr. Hice, who is the ranking member of the Government
Operations Subcommittee.
Mr. Hice. Thank you, Madam Chair. And, you know, it is
amazing to me, Madam Chair, that you mentioned creation of 6
million new jobs. It is stunning that you did not mention the
tens of millions of jobs that were lost by Democratic policies
to pay people not to work, nor was mentioned the fact of the
millions upon millions of jobs that were lost by the ridiculous
vaccine mandates and so forth. And here we are yet again. Like
so many of the hearings in this committee as of late, this is
yet another one that is but a farce. Here we have the Democrats
trying to take a victory lap, and, quite frankly, they are not
even in the race, trying to somehow claim that the American
Rescue Plan has created a booming economy.
That is laughable that somehow we have a booming economy
now. I wonder if my friends on the other side of the aisle even
look at what is happening in our country. Nobody is buying this
argument, nor should they. We have rising energy costs, we have
rising rent costs, we have got grocery bills skyrocketing, and
we are going to try to sit here today and listen to the
Democrats claim that we have a booming economy. The American
Rescue Plan literally spewed--spewed--money on states and
localities under the guise of pandemic relief, in spite of the
fact that economists all across the political spectrum were
arguing that that kind of money was not even needed.
And as has already been mentioned, I am sure these states
and localities were happy to receive all that money, but it is
absolutely reckless spending, like throwing lighter fluid on a
bonfire of inflation, and now we literally have a wildfire of
inflation that is out of control. In fact, we haven't seen
rates like this since the miserable days of Jimmy Carter's
Administration. The rising rates are obviously the result of a
toxic brew of bad Democratic policies, trillions of dollars in
spending for pet projects and liberal wish lists a mile long.
And I will say it again: the only reason that unemployment
numbers might be falling is because Democrat policies, like
paying people not to work and enforcing vaccine mandates that
kept workers off the job--and by the way, those things didn't
have any impact on preventing COVID--but those things are
finally coming to an end. That is why we are seeing a change.
It is not because of this American Rescue Plan. There are so
many other things this committee should be spending its time
on, but, quite frankly, time is a resource, and like money,
Democrats are more than happy to waste it.
With that, Madam Chair, I yield back.
Chairwoman Maloney. The gentleman yields back, and the
facts tell a very different story than my good friend. And I
would like unanimous consent to place in the record a Moody's
report on the American Rescue Plan and inflation, and it is an
economic analysis published just last week by Moody's Analytics
where our minority witness worked for over five years.
This report completely debunks my Republican colleagues'
claims that the American Rescue Plan is responsible for the
inflation we are seeing today. The report states, and I quote,
``The American Rescue Plan has been criticized as being too
large, overstimulating an already fast-improving economy and
significantly contributing to the currently uncomfortably high
inflation. This perspective is not consistent with our
results.'' Moody's found that any inflation from the American
Rescue Plan occurred primarily early in 2021 and was actually a
positive sign that businesses were finally returning to normal
prices after the pandemic had forced them to sell below market
rates. According to Moody's, the inflation we have seen
recently is caused by the Delta and Omicron surges and the
global supply chain, not the American Rescue Plan. In fact,
Moody's found that the American Rescue Plan is, and I quote,
``responsible for adding well over 4 million more jobs in
2021,'' and that it sped up our Nation's jobs recovery by more
than a year and helped our country avoid a double-dip
recession.
I ask unanimous consent to put this in the record, and I
urge my Republican colleagues to read this report. It is a very
important one.
Without objection.
Chairwoman Maloney. I would now like to yield briefly to my
colleague, Congressman Krishnamoorthi, to introduce our first
witness. Raj?
Mr. Krishnamoorthi. Thank you, Chair Maloney. As an
Illinoisian, and I am proud to introduce my Governor, Illinois
Governor J.B. Pritzker. A descendant of immigrants from the
Ukraine, Governor Pritzker has heralded a renaissance in
Illinois' finances as well as its health and well-being. He has
balanced the budget, he has reduced debt and pension
obligations, and because of his efforts, all three credit
rating agencies have upgraded Illinois' credit. On top of that,
during the pandemic, he led a robust vaccination program and
very, very strong relief for small businesses. In short, it is
a new day in Illinois, and we look forward to hearing Governor
Pritzker explain why. Thank you, Governor Pritzker.
Chairwoman Maloney. After Governor Pritzker, we will hear
from Fawn Sharp, who is the president of the National Congress
of American Indians. Next, we will hear from Victoria Woodards,
who is the mayor of Tacoma, Washington. Next, we will hear from
Gary Moore, who is the judge-executive of Boone County,
Kentucky. Next, we will hear from Dr. Michael Leachman, who is
the vice president for state fiscal policy at the Center for
Budget and Policy Priorities. Finally, we will hear from Marc
Joffe, who is a senior policy analyst at the Reason Foundation.
The witnesses will be unmuted so we can swear them in.
Please raise your right hands.
Do you swear to affirm that the testimony you are about to
give is the truth, the whole truth, and nothing but the truth,
so help you God?
[A chorus of ayes.]
Chairwoman Maloney. OK. Let the record show that the
witnesses answered in the affirmative. Thank you.
Without objection, your written statements will be made
part of the record.
With that, Governor Pritzker, you are now recognized for
your testimony.
STATEMENT OF THE HONORABLE J.B. PRITZKER, GOVERNOR, STATE OF
ILLINOIS
Mr. Pritzker. Thank you very much, Madam Chairwoman. I want
to thank my friends who represent us in Illinois who are on
this committee: of course, Congressman Krishnamoorthi and
Congresswoman Robin Kelly. To you, Chair Maloney, Ranking
Member James Comer, distinguished members of the committee,
thank you for the opportunity to speak with you this morning.
I've governed through this pandemic focused on a central
tenet, and that's the role of government in a crisis is to end
the crisis as quickly as possible and to alleviate the pain it
inflicts on the people that we serve. Roughly one year into the
pandemic, the American Rescue Plan injected a burst of
resources into the national economy at a critical time. With
all our efforts over the last two years, our investments in
working families and small businesses are paying off. In 2021,
our Illinois job growth rate outpaced all our neighboring
states and exceeded the national average. Also in 2021,
Illinois grew new startups at a faster clip than all other
midwest states and at a higher rate than the top eight most
populous states nationally, states like California, and Texas,
and Florida. There's no doubt in my mind that the ingenuity and
resilience of our people played a huge role in shaping that
trajectory.
I also know that my administration has used our resources,
including ARPA funds, to provide as much short-and medium-term
stability as possible to fuel our progress with great results.
The program we discuss today provided the state of Illinois
with $8.12 billion. Our local governments, including Chicago,
are on track to receive another $5.93 billion. We view these
resources as one-time recovery opportunities. We put half a
billion dollars toward some of the most direct building blocks
of our recovery: small businesses, tourism support, work force
development, and restoring our commercial corridors. That
includes $300 million for our Back to Business Grant Program,
building on our $500 million 2020 program to bring relief
grants to small businesses all across Illinois.
Our ARPA funds also made a significant impact on the No. 1
challenge of the last two years: our ability to manage and
mitigate the virus itself. The state coordinated almost 8,000
mobile vaccination clinics for some of our most vulnerable
residents, including more than 2,000 school and youth
vaccination clinics. And at the peak of the Omicron surge,
Illinois had nearly 3,000 healthcare workers deployed across
the state to keep our healthcare system operating. That is in
addition to the healthcare workers we already employed. We
increased support for immigrant welcoming centers. We ensured
continuous government services at frontline agencies like the
Department of Public Health. We launched an unprecedented
commitment to combat firearm violence. We accelerated
infrastructure investments, including our Internet Connectivity
Expansion Program, and the list goes on.
I have always believed that our economic recovery, both as
a Nation and as a state, goes hand-in-hand with our recovery
from COVID-19, a truth that played out after the 1918 pandemic,
and a truth that I expect history will tell of the moment that
we live in now. The virus has remained a threat for far longer
than any of us would like, but we continue to find ways to live
our lives, grow our economy, and protect the vulnerable all at
the same time. I appreciate the Federal Government's ongoing
support of that mission, and I thank you, all of you, on the
committee for the privilege of presenting my testimony to you
and look forward to your questions.
Thank you, Madam Chair.
Chairwoman Maloney. Thank you. President Sharp, you are now
recognized for your testimony.
STATEMENT OF THE HONORABLE FAWN SHARP, PRESIDENT, NATIONAL
CONGRESS OF AMERICAN INDIANS
Ms. Sharp.[Speaking native language.] Good morning,
Chairwoman Maloney, Ranking Member Comer, and members of the
House Committee on Oversight and Reform. I am Fawn Sharp, vice
president of the Quinault Indian Nation and president of the
National Congress of American Indians. Thank you for holding
this hearing on the impact of the American Rescue Plan's Fiscal
Recovery Funds.
Like all other governments, tribal nations strive to ensure
the health and well-being of their citizens and all those who
reside within their communities. Like all other governments,
when the COVID pandemic struck, tribal nations deeply felt the
toll on our collective health, economies, and cultures. And
like all governments, tribal nations led the charge in ensuring
that our communities were as safe as possible, using the
resources we had available. While no government was fully
prepared for all of COVID's impacts, Indian Country began the
pandemic on unequal footing compared to state and local
governments. Our needs, especially in the areas of healthcare
funding and infrastructure development, have historically been
neglected or, in some cases, completely ignored.
Since the COVID outbreak in the early 2020, we have lost
many of our elders, those who help protect our languages, our
ceremonies, and our cultures, and we have lost some of our
youth, the future leaders of our nations. These devastating
losses will no doubt have impacts for generations to come.
Also, due to the pandemic, Indian Country has been dealing with
unprecedented economic impacts. Where Federal, state, and local
governments rely heavily on tax revenues, we in Indian Country
do not have the same ability because of dual taxation and other
economic policies and barriers. Most tribal nations rely on our
businesses for commercial profits, as opposed to governmental
revenues, through a system of taxation to provide essential
services and make up for the Federal funding gaps that have
existed for decades or longer. Further, because much of our
governmental revenue is generated from tourism and service
industries, when reservations closed for public health reasons,
when travel stopped, and when tribal offices were shut down for
extended periods of time, it took a disproportionate toll on
our economies. Tribal gaming lost $4.4 billion in revenue in
2020 alone and another $1 billion in lost wages. After one year
of the pandemic, only a fifth of tribal governments, tribally
owned businesses, and tribal organizations had stable revenues,
and over half of those lost at least 40 percent of their
revenues, while most tribes saw operational costs rise by 20
percent or more.
It will take time to fully quantify the economic impacts of
COVID-19 to Indian Country, but there is no doubt that the
pandemic has had a uniquely devastating effect on tribal
nations' economies and our ability to provide essential
governmental services. The American Rescue Plan Act of 2021 was
a crucial measure to support the immediate needs and help
address the systemic under funding of Indian Country. Its $31
billion in funding to Indian Country represents the largest
single infusion of Federal funding to Native Americans in
history, and we thank Congress and the Administration for
hearing our call and acknowledging the needs of our nations.
I would like to share with you some of our success stories,
from Alaska to the Southwest, to the Heartland in Oklahoma, to
the Great Lakes, up into the New England area, and down into
the Gulf of Mexico. In healthcare and wellness, many tribes,
like the Mississippi Band of Choctaw Indians, invested in
improving their healthcare centers, and the Cherokee Nation
made investments in healthcare services while also emphasizing
mental health. Several tribes invested funding into healthcare
mobile units, like the Northern Arapaho Tribe's mobile medical
unit and Gila River Indian Community's mobile COVID-19
vaccination unit. The Osage Nation expanded its farming and
meat processing, while the Round Valley Tribes developed a
much-needed food bank to address food insecurity. To support
our economies and infrastructure, we saw tribes, like the Saint
Regis Mohawk Tribe, create a pandemic recovery business support
program to help nearly 300 tribally registered businesses.
Tribes like the Navajo Nation and many others are investing in
new water lines, electric lines, broadband, road improvement,
and housing. To support operations, several tribes, like the
Oglala Sioux Tribe, constructed new infrastructure for their
emergency management, and many tribes addressed housing issues,
like the native village of Saint Michael in Alaska, who
constructed 26 small homes, increasing the number of homes in
the village by nearly 25 percent.
The Fiscal Recovery Funds acknowledge our inherent
sovereignty and bring us one step closer to achieving
governmental parity. It provides not just funding but the
deference and flexibility to use funds as we see fit. Parity,
deference, and acknowledgement of our tribal nations' inherent
rights are the foundation for building a stronger Nation-to-
nation relationship. This must be the new standard for
engagement between our tribal nations and the Federal
Government going forward. We have seen what we can do when we
began to work together as sovereigns. We must continue down
that path, and only then will tribal nations fully flourish.
We thank you.
[Speaking native language.]
Chairwoman Maloney. Thank you. We now recognize Mayor
Victoria Woodards, and she is the vice president of the
National League of Cities. You are now recognized for your
testimony.
[No response.]
Ms. Woodards. Sorry about that. Got to get myself off mute
this morning.
STATEMENT OF THE HONORABLE VICTORIA WOODARDS, MAYOR, CITY OF
TACOMA, WASHINGTON, ON BEHALF OF FIRST VICE PRESIDENT, NATIONAL
LEAGUE OF CITIES
Ms. Woodards. Good morning, Chair, and thank you so much
for having me here this morning to be able to speak to you
about the work that you all have done that has been so helpful
to my community.
Chairwoman Maloney, Ranking Member Comer, and members of
the committee, I am Mayor Victoria Woodards of Tacoma,
Washington, and I am also, as it's been said, the first vice
president of the National League of Cities, or NLC, an
organization that represents 19,000 cities, towns, and villages
nationwide. I am honored to testify before the committee today
on the State and Local Fiscal Recovery Funds Program, which was
a part of the American Rescue Plan Act of 2021. I want to thank
the committee for their relentless work drafting ARPA and for
working closely with outside stakeholders, including NLC, to
ensure that every local government, regardless of size,
received an SLFRF grant.
In the spring of 2020, our Nation faced an unprecedented
public health emergency with devastating economic repercussions
for our communities. There was a nationwide shutdown of
businesses, schools, services, entertainment, and more to stop
the spread of COVID-19. This shutdown, which was needed, halted
all local economies, resulting in the national economic crisis
at the same time of a national public health crisis. Local
governments, like Tacoma, continued to provide critical
services during this time to keep our city running and meet the
needs of our most vulnerable citizens.
As the pandemic continued, city of Tacoma employees
continued to provide essential services, and the city absorbed
unforeseen costs across every municipal department while
overseeing the local public health response and addressing
community needs. Pre-existing problems and inequities within
our city were exacerbated by the crisis. Sadly, many
constituents got caught in the virus and experienced related
health problems while the broader community contended with its
impacts, including job loss, income insecurity, housing
insecurity or homelessness, food insecurity, and declining
business. The Federal Government relied on their partners at
the local level to address these challenges, and we did so for
nearly a year without access to any direct or flexible funding.
That changed in March 2021 when lawmakers passed the
American Rescue Plan Act, providing $350 billion to inter-
government partners, including $45.57 billion worth of
assistance for metropolitan cities, like the city of Tacoma. My
colleagues and I heralded the arrival of those critical
resources last spring, which empowered us to manage the public
health emergency, address the urgent needs of our community,
anticipate long-term impacts, and pave the way for a more
equitable recovery. We would not have been able to accomplish
that without the critical Federal funding provided by the
American Rescue Plan Act.
Tacoma faced over $59 million worth of estimated revenue
loss due to the COVID-19 pandemic and public health emergency.
During 2020, the city took quick action to reduce expenses
through program elimination, time reductions, and temporary
furloughs to address the projected revenue losses based on the
projected losses of 2021 and 2022. The city of Tacoma planned
significant cuts to our central and basic community services.
Our story is not unique, but what is unique is that the SLFRF
Program transferred the decision-making process from the
Federal Government to local governments, empowering those of us
who know their communities best with resources to enact real,
immediate, impactful change. This is a major step forward in
recognizing the vital role of local economies, and stabilizing
our national economy, and bolstering our collective recovery.
In Tacoma, this Federal funding allowed us to sustain
essential services and to meet emergent needs of our community
across a variety of issues. Most importantly, the funding makes
a difference in the lives of our residents. Tacoma leveraged
ARPA dollars and existing resources to increase services and
support programs targeting our city's most vulnerable
populations. Though our partnerships, we provided shelter, case
management, and other supportive services to our homeless youth
and adults. We are expected to serve almost 10,000 bed nights
in 2022. Those stabilization efforts included health and
wellness appointments, employment services, and financial
counseling for those in need. Our service providers connected
our veterans with benefits, housing, employment, and other
resources. And as a veteran myself, I am particularly proud of
our work to support this population.
While this work in recovery is very much still under way, I
want you to know that there is a long road ahead of us, and I
am thankful to the members of this committee for your
leadership and advocacy. Thank you again for allowing me to be
here this morning to testify, and I look forward to your
questions.
Chairwoman Maloney. Thank you so much for your testimony.
We will now hear from Honorable Judge Moore, judge-
executive, Boone County, Kentucky. He will be testifying on
behalf of the National Association of Counties. You are now
recognized, Judge Moore.
STATEMENT OF THE HONORABLE GARY MOORE, JUDGE-EXECUTIVE, BOONE
COUNTY, KENTUCKY, AND IMMEDIATE PAST PRESIDENT, ON BEHALF OF
NATIONAL ASSOCIATION OF COUNTIES
Judge Moore. Thank you, Chairwoman Maloney, Ranking Member
Comer, my friend and fellow Kentuckian, and distinguished
members of this committee. My name is Gary Moore. I am the
elected judge-executive in Boone County, Kentucky. I'm also
here today in a role as the immediate past president of NACo,
the National Association of Counties. Since the onset of the
Coronavirus pandemic, counties have served on the frontline. We
support over 1,900 local public health departments, nearly
1,000 hospitals and critical access clinics, more than 800
long-term care facilities, and 750 behavioral health centers.
We're also responsible for emergency operations, 9-1-1 service,
protective services for children, for seniors, and for
veterans, among many other responsibilities.
I am here today to discuss the impacts of the American
Rescue Plan's Coronavirus State and Local Fiscal Recovery Fund
and the critical importance to this program, which is needed to
help support Federal, state, and local recovery.
I would like to begin first by expressing counties'
appreciation for the work and passage of the American Rescue
Plan, which provided aid to all counties of all sizes. As the
pressing challenges and needs continue to outstrip depleted
resources of many counties during this unprecedented national
emergency, this law recognizes counties' vast responsibility to
care for our most vulnerable residents: our sick, unemployed,
elderly, and our youth. Counties are steadfastly committed at
the local level to good financial stewardship, investing these
Recovery Funds quickly and effectively to support the health
and safety of our residents and strengthen the economy. I want
to add we were also supportive of guardrails for these funds.
Since the enactment of ARPA, American counties have been
working hard to develop Recovery Fund implementation plans that
will spur an equitable economic recovery across our Nation.
NACo analyzed 200 county ARPA Recovery Fund plans, revealing
county-designed community investments across key areas of the
need. In my home county of Boone County, Kentucky, we're
investing funds to address critical infrastructure challenges.
With the help of our ARPA dollars, we've been able to expand
and improve broadband accessibility to 40,000 households. We're
in the middle of our plan now. It'll be completed by March of
next year. We have also used Recovery Funds to ensure access to
clean drinking water for schools and improve sewer and water
systems for our residents.
Beyond infrastructure investments, counties are using funds
to support children, families, and individuals. Los Angeles
County, California was able to implement a comprehensive
homeless strategy to provide 24-hour emergency shelter services
to individuals over the course of the pandemic. In Arizona, a
significant portion of Recovery Funds have been invested to
provide educational, social, emotional, and mental health
services tailored to the community's high veteran population.
And in Howard County, Maryland, the county has used $8 million
in Recovery Funds to address staffing challenges from the
pandemic and to provide support to public school employees.
These stories are being replicated across the country as
counties of all stripes are eagerly investing Recovery Funds.
To date, over 99 percent of the Nation's 3,069 counties have
accessed their Recovery Funds--99 percent. This bipartisan
demand of access to the funds demonstrates the critical need of
the program.
While the American Rescue Plan offered vital relief to
local governments and is an important critical step toward
supporting our Nation's recovery, there are additional tools
that our Federal partners can leverage to further help local
governments address budget challenges, stagnant revenue pools,
and unfunded state and local mandates. Counties urge Congress
to pass the bipartisan State, Local, Tribal, and Territorial
Fiscal Recovery, Infrastructure, and Disaster Relief
Flexibility Act. Passage of this legislation on a bipartisan
compromise that unanimously passed the U.S. Senate is key to
successfully achieving our shared goals of helping our
residents thrive.
Once again, I want to thank this committee, Chairwoman
Maloney, and Ranking Member Comer. Thank you.
Chairwoman Maloney. Thank you very much for your testimony.
We will now hear from Dr. Leachman, who is the vice
president for state fiscal policy of the Center on Budget and
Policy Priorities. Thank you. You are now recognized.
STATEMENT OF MICHAEL LEACHMAN, PH.D., VICE PRESIDENT FOR STATE
FISCAL POLICY, CENTER ON BUDGET AND POLICY PRIORITIES
Mr. Leachman. Chairwoman Maloney, Ranking Member Comer,
distinguished members of the committee, thank you for the
opportunity to testify today. I am Mike Leachman. I am vice
president for state fiscal policy at the Center on Budget and
Policy Priorities, a nonpartisan research and policy institute
in Washington, DC.
After the Great Recession hit a decade ago, Congress
provided fiscal relief to states that was important, but it was
too small and it ended too soon. So states laid off hundreds of
thousands of workers and cut services just when the need for
services was particularly high. Cities, counties, and tribal
governments got no direct fiscal help at all. As a result, the
economy's recovery was much slower and weaker than it needed to
be. For the first two years after the recession ended, the
private sector added 1.3 million jobs, but states and
localities cut 450,000 jobs. They were effectively still in
recession, and that limited the economy's recovery. This time,
the Federal response has been much more robust with aid and
multiple pandemic bills in 2020, and the American Rescue Plan
has also been a huge success, helping to make the recession the
shortest on record and creating much less hardship than we
otherwise would've seen. In fact, Mark Zandi and other
economists at Moody's Analytics recently found that if Congress
hadn't enacted the Rescue Plan in early 2021, the economy
would've been at serious risk of a double-dip recession.
The Rescue Plan's State and Local Fiscal Recovery Funds
were an important part of that success. Before the Rescue Plan,
mid-sized and small cities and counties received no direct
flexible fiscal aid, and tribal governments received much less
than they needed. States received some flexible aid in the
CARES Act of 2020, but they couldn't use the aid to cover
revenue losses. And before the Rescue Plan, states had to spend
their fiscal relief on a short timeline. Fiscal Recovery Funds,
by contrast, can be allocated through 2024, giving governments
time to better address the pandemic's ongoing impacts on, for
instance, mental health and children's learning, which are key
steps to building a stronger recovery.
States are putting most of the funds to work already. As of
a few weeks ago, states had appropriated 72 percent of the
funds they've received so far, and many states are in
legislative sessions right now developing plans for using the
rest. The limited data that we have about local governments
suggest they also have allocated most of their funds. So far,
states are using most of the funds for four primary purposes:
first, to pay for existing government services that they were
finding harder to provide because of pandemic-induced revenue
losses; second, to provide healthcare and human services for
people affected by the pandemic; third, to help affected
businesses and for needed economic development and
infrastructure; and fourth, to shore up state unemployment
trust funds, which were hit hard after the pandemic and
resulting spike in unemployment. Localities, tribal
governments, and territories also are using the funds in ways
that help achieve the Rescue Plan's goals.
Since December 2020, states and localities have added back
470,000 jobs. The Moody's analysis that I mentioned earlier
estimates that without the American Rescue Plan and earlier
Federal pandemic aid, states and localities would've laid off
another 1.2 million workers in 2021. In other words, they would
be holding back the recovery like they did after the Great
Recession. The bottom line is that unlike after the Great
Recession, states, localities, territories, and tribal
governments are contributing to the recovery instead of
constraining it and are well positioned to leave the country
more prepared when the next downturn hits.
In the future, policymakers should avoid the mistakes of
the Great Recession's fiscal aid response and provide enough
aid to enable states and other governments to meet the needs of
residents and businesses. Congress should also enact a system
of automatic stabilizers, such as automatic increases in
Medicaid matching rates, when unemployment rises and other
automated aid that links the amount and duration of aid to
economic conditions. And they should require states and other
governments to spend sizable portions of their aid to help low-
income people, communities of color, and others who are
particularly likely to be hurt by an economic crisis.
Thank you again, and I'd be happy to take your questions at
the appropriate time.
Chairwoman Maloney. We will now hear from Mr. Joffe, who is
a senior policy analyst for the Reason Foundation. Mr. Joffe.
STATEMENT OF MARC JOFFE, SENIOR POLICY ANALYST, REASON
FOUNDATION
Mr. Joffe. Chair Maloney, Ranking Member Comer, and
Oversight Committee members, thank you for giving me the
opportunity to share my observations about the state and Local
Fiscal Relief Funds provided under the American Rescue Plan
Act. My name is Marc Joffe, and I am a senior policy analyst at
Reason Foundation, specializing in fiscal policy issues.
When U.S., Federal, state, and local governments began
implementing COVID-19 public health measures two years ago this
month, it was reasonable to expect that states, counties,
cities, and smaller government jurisdictions would face large
and widespread revenue losses. But by early 2021, in the run-up
to the passage of ARPA, it had become apparent that the severe
revenue losses government entities were expecting had not
materialized and were unlikely to occur. Thanks to recent
technological innovations, such as cloud computing and video
conferencing, large parts of the American work force were able
to work remotely without significant productivity losses. While
some sectors of the economy, like travel and hospitality, were
hit hard, consumers substituted online purchases for visits to
retail stores. Most Americans received Federal stimulus checks,
and Federal Reserve stimulus helped elevate stock and real
estate values. As a result, tax receipts from income, capital
gains, sales, and property taxes all remained robust.
In February 2021, I determined from a review of interim
state fiscal reports that state governments had suffered an
overall revenue decline of just 0.01 percent between calendar
years 2019 and 2020. Similarly, quarterly Census Bureau data on
local government revenues also suggested that they had not
suffered much through that point of the pandemic. These totals
hid variability across governments. Entities heavily dependent
on tourism, such as Hawaii, Nevada, and the city of Anaheim,
home to Disneyland, were hit harder than other places.
California also suffered significant revenue losses at the
beginning of the pandemic, but these losses were offset by a
gusher of income and capital gains taxes from technology
companies and their employees, who benefited from the pandemic-
driven boom in online activity. While the facts available to us
last March may have justified a targeted revenue program for a
small number of government entities, it clearly did not support
a generalized Federal aid program. Unfortunately, advocates of
the stimulus largely relied on stale revenue projections as
well as overly pessimistic responses from a survey of city
officials that was taken at the start of the crisis.
The Federal funds were not only excessive, but they were
also poorly targeted. The state of California, which received
$26.5 billion, or 7.6 percent of the total aid package, went on
to report record state budget surpluses. There was also a
disturbing discrepancy in per capita aid distributions. While
Florida's state, county, and local governments were allotted
$739 per capita, the Commonwealth of the Northern Mariana
Islands and its local governments are receiving more than
$10,500 per capita. The Commonwealth itself was allotted $482
million to spend on its 47,000 residents. The most recent
interim report submitted by states, counties, and metropolitan
cities to the Treasury Department indicated that governments
had spent less than $10 billion of the revenues as of July 31,
2021. The largest share of expenditures went to replenishing
depleted state unemployment funds. While this was a judicious
use of relief proceeds, it is not one that provides any near-
term stimulus. With so little of the Federal funds being spent
on employee supplies and services, it is clear that state and
local ARPA spending had little impact on economic growth during
the 2d quarter of last year. In hindsight, this result
undermines another dubious justification that was used to call
for the quick passage of ARPA: that it would provide a quick
stimulus to lift the economy out of the pandemic-induced
recession. In fact, we know the economy had already been
growing for 11 months before ARPA was signed.
Legislative restrictions on the use of the Federal proceeds
and complex Treasury regulations have compounded challenges to
effectively use the funds. Several states are litigating a ban
on using the money to backfill tax reductions, which could
stimulate economic activity. Other states, like Illinois, which
might have used ARPA funds to pay down debt from their unfunded
public pension liabilities, were prohibited from doing so. The
Treasury Department did not publish final regulations on the
usage and reporting of funds until January 2022 after most of
the money had been distributed. The Department was also slow to
publish reports it received from recipient governments, and,
contrary to the spirit of the bipartisan GREAT Act of 2019, did
not provide machine-readable reporting standards for grantees.
As a result, our understanding of the overall impact of the
Federal funding is based more on anecdotes than on rigorous
data analysis.
Thank you for your time today, and I look forward to
answering your questions.
Chairwoman Maloney. Thank you so much. I now recognize
myself for five minutes for questions.
The Great Recession left a tremendous drag on the economy
that slowed growth for many years, and a major reason was
insufficient Federal support for state and local governments.
Thanks to the American Rescue Plan, the recession caused by the
Coronavirus pandemic was the shortest on record, and the
country was able to avoid a double-dip recession in the spring
of 2021. This chart says it all. Since the beginning of the
pandemic, U.S. GDP has grown at more than three times the rate
of any other G7 country. That is a remarkable achievement, and
this chart expresses it.
Dr. Leachman, what was the role of the State and Local
Fiscal Recovery Funds in contributing to this really remarkable
outcome?
[No response.]
Chairwoman Maloney. Can you speak up and turn on your mic?
Mr. Leachman. Excuse me. Thank you.
Chairwoman Maloney. Mm-hmm.
Mr. Leachman. After the Great Recession, states and
localities really held back the economic recovery. You know,
they were still laying off workers when the rest of the economy
was trying to get back on its feet, and this time, states and
localities are contributing to the recovery, and that is very
important. The Fiscal Recovery Funds are helping to make that
happen by providing funds to continue pushing back on the
virus, hire back workers, and restore cuts that were made
earlier in the pandemic to help people struggling due to the
pandemic to eat, and to remain housed, and to pay their basic
household expenses, help businesses that were hurt by the
pandemic to get rolling again, and tackle some of the
challenges that the pandemic caused that will take sustained
investment to unravel, as I mentioned, like increased mental
illness and helping children to recover the learning time that
they have lost, and, finally, to address the structural
inequities that have made the pandemic especially harmful in
some communities. Those are the people that are hardest hit,
and so investments there will have the biggest bang for the
buck.
Chairwoman Maloney. Thank you.
And after the catastrophic job and income losses under the
previous administration, wages have also seen strong growth in
the last year. Even after adjusting for inflation, incomes in
the U.S. rose on average of 5.6 percent in 2021, and incomes
for the bottom 50 percent of wage earners rose by nearly 11
percent.
This is a very rapid recovery, as you can see. In contrast,
after the Great Recession, it took more than a decade for job
growth to reach just three percent. So I would like to ask
Governor Pritzker, did the recovery funds in the American
Rescue Plan help boost the job growth in your state over the
last year, and how has this impacted the people you represent?
Mr. Pritzker. Madam Chairwoman, we had significant growth
during 2021, in part because of ARPA. We made investments that
would make it so because of those resources. Just one example
is, as you know, one of the challenges people faced was
childcare. The pandemic itself limited the availability of
childcare. We had people who wanted to go back to work but
needed childcare and needed help to get that childcare.
We used a large amount of resources to keep our childcare
system going and to reward people for staying in that line of
work and then helping people get into the business of providing
childcare. So that's one area that helped us achieve
significant growth. Our growth, by the way, was higher in 2021
than all of our neighboring states, and we're proud of the
growth that we saw during that period.
One other item I'd point out is our Back to Business grant
program, which supported our small businesses across Illinois,
helped people stay in business, helped people to grow their
business, to bring back workers they may have had to lay off or
keep them on. So we're very pleased about the results of the
ARPA dollars that we got and the investments that we made on a
state level with our own GRF dollars to invest in training
programs to get people into jobs that they may not have
otherwise been able to obtain.
Chairwoman Maloney. Thank you.
President Sharp, I would like to hear from you. What would
the forecast look like for tribal governments right now if they
did not have the access to the recovery funds?
Ms. Sharp. Yes, thank you for that question.
The outlook would certainly be bleak, and I can't help but
think actual lives were saved. I remember in the early days of
the pandemic, we saw images coming out of Italy and Spain, and
at that time, we didn't have even direct access to the National
Strategic Stockpile for PPE. And tribal nations are
disproportionately affected, both in terms of infection rate
and death. So the outlook would not only be grave for economies
and jobs, but actual loss of massive life.
And we know historically when tribal nations have gone
through pandemics, including the 1918 pandemic, entire
communities were wiped out. So this was a significant safety
net for all of Indian Country.
Chairwoman Maloney. Thank you. I am glad that our country's
growth rate for the GDP, the gross domestic product, is
booming, thanks to the American Rescue Plan.
My time has expired, and I yield back.
And I now recognize the distinguished chairman--nope. We
are going to go to the gentleman from Georgia. Mr. Hice is
recognized for five minutes.
Mr. Hice. Thank you, Madam Chair.
Mr. Joffe, let me begin with you. The total price tag of
this alleged COVID bill was nearly $2 trillion, and Congress
had actually already spent and passed a $4 trillion COVID
relief package, of which, by the way, about more than $1
trillion of that had not been spent when this bill was passed.
What, in your opinion, was the impact of this unprecedented
spending on inflation?
Mr. Joffe. I think it was--it was very inflationary, as
the--as the numbers show. The state and local funds didn't
really have much of an effect in 2021 because they really were
not spent. But a lot of the other stimulus, including the
individual checks that went out, clearly went right back into
the economy, and drove up prices at a time that we had supply
chain issues.
Mr. Hice. As of January this year, in fact, the inflation
rate has risen to a record-breaking 7.5 percent, higher than at
any point in the last 40 years. I think we all know, but what
are some of the impacts that this has on the average American
family?
Mr. Joffe. It really undermines people's sense of security.
People who have saved a fixed amount of money for retirement,
for example. Now they have to worry, in fact, is that going to
run out? The people who are living paycheck to paycheck. Are
their wage increases going to be keeping up with the increased
price of gas, food, and other--other essentials?
So I think it really undermines people's sense of security.
Mr. Hice. You know, one of the other issues of this whole
thing that is greatly disturbing to me is the fact that this
massive Democratic spending bill included some $350 billion for
state and local governments, in addition to $100 billion that
Congress had spent just the year before. But $350 billion in
this alone with no guardrails.
So how in the world are we even having a hearing today
supposedly regarding oversight on $350 billion that had no
guardrails on it? Do you know of any guardrails?
Mr. Joffe. Well, there was one guardrail, which I think was
very unfortunate, which is the restriction on making deposits
into an underfunded pension fund. And I think a lot of state
and local governments could have used that to have achieved
more long-term fiscal stability. Another unfortunate guardrail
was the restriction on using it to backfill tax cuts, and tax
cuts in many states would help stimulate economic growth.
Other than that, I agree, there were very few restrictions
on how the money could be used, and it clearly has not been
used in a uniform way to recover from the pandemic. It's been
used really to fund a wish list of preexisting ideas.
Mr. Hice. So here we are, having a fake oversight hearing
on money that we don't have any idea where it went, really. It
is my understanding that you have submitted a FOIA request to
the Treasury Department to try to get a report on the funding
in this ARPA bill. Have you been successful?
Mr. Joffe. Right. Last September, I submitted a FOIA
request asking for all of the interim fiscal recovery reports,
and that was not--that was not handled. I resubmitted the
request in January, and I'm still waiting for a response.
Oddly enough, while I was preparing for this, I stumbled
across a page on the Treasury's website where they had, in
fact, posted all the reports, and I analyzed them for my
testimony today. But they haven't really made much of an effort
to alert the public to where they can find all of that
information.
Mr. Hice. So what reason have they given you, or have they
given you any reason for not providing an ARPA funding report?
Mr. Joffe. The response was really strange. The FOIA
representative in Treasury last year told me our FOIA office
doesn't have these reports so we can't fill your request. But
Treasury clearly had these reports because they had to be
submitted on Treasury's online portal. So I didn't find the
fact that the FOIA office itself didn't have the reports to be
a very convincing reason to not fill the FOIA.
Mr. Hice. Well, I thank you for being here today.
And yet again, Madam Chair, I mean, without these reports
being made public, there is simply no one, including this
committee, that is having any degree of oversight over the
money that has been spent. This is unacceptable.
And with that, I yield back.
Chairwoman Maloney. The gentleman yields back, and the
gentlelady from the District of Columbia, Ms. Norton, is now
recognized.
Ms. Norton. Thank you, Madam Chair.
And let me thank you for giving us the opportunity to
indicate what the American Rescue Plan has done in the kind of
detail we are doing here today. The CARES Act was one of the
starkest examples in recent years of why Congress should grant
statehood for the District of Columbia. The Republican-led
Senate intentionally treated D.C. as a territory instead of a
state for fiscal relief in the CARES Act, depriving the
District of $755 million during the most critical time of the
pandemic.
Republicans did so even though the District residents not
only pay the same Federal taxes, but the highest per capita in
the United States, more than 27 states. So we are grateful that
the recovery funds in the American Rescue Plan retroactively
provided that $755 million to the District and treated D.C. as
a state, county, and city to reflect the reality that D.C.
provides services to each of these levels, and I thank the
chairwoman for her support for these provisions.
The District of Columbia is allocating--and this question
is for Dr. Leachman--is allocating $900 million of its recovery
fund allocation allotment for services for disproportionately
impacted communities. That is more than we are investing in any
other expenditure category.
Dr. Leachman, based on the data we have available, is the
District of Columbia unique in prioritizing this expenditure
category above others, and should other states and localities
follow what the District is doing?
Mr. Leachman. Excuse me, Representative Norton, could you
please repeat the area in which the District is focusing its--I
didn't quite hear.
Ms. Norton. Its services for disproportionately impacted
communities.
Mr. Leachman. Oh, thank you. You know, this is--this is a
very important response. The impact of the pandemic has been
very unequal by race, by gender, and by community. And so
directing resources in ways that--that help those communities
particularly is a really central part of what the response
needs to be.
We are seeing communities and states around the country
focusing attention in that way, and the Treasury Department's
guidance really encourages it. You know, I could give you a
couple of good examples. In California, for instance, they're
revamping their youth mental health system using fiscal
recovery funds in ways that will have--will have equitable
impact, will improve particularly the mental health services
that are received by youth of color and low-income--and low-
income youth.
In Maryland, the fiscal recovery funds are going to invest
in education investments that will particularly benefit
communities that have historically been disinvested in the
education system. So I really appreciate the District focusing
its funds in that way. I think it's right in line with what
Treasury has been encouraging and in line with what will help
build a strong recovery.
Ms. Norton. Governor Pritzker, you have been a leader in
investing recovery funds to support disadvantaged communities,
which is my focus in these questions. Can you review some of
the highlights of these investments, and do you believe they
have created a more resilient future in your state?
Mr. Pritzker. Well, thank you for the question.
Let me begin by saying that, as you know, Coronavirus had
its most devastating effects on the most disadvantaged
communities, communities that have been disinvested from for
many, many years. And so we focused many of our resources
precisely on those communities, not just in the vaccination and
other healthcare recovery efforts, but also in the economic
recovery effort.
So, for example, within our Back to Business program and
the prior small business program in 2020 from the CARES Act
dollars, we focused on making sure that businesses that were
owned by people in those disadvantaged communities were getting
a large piece of the pie. Remember, the PPP didn't cover
everybody, and in fact, many people--black and brown people,
people of color across the state of Illinois--couldn't access
PPP--they didn't have the right resources--or navigate it.
We created community navigators to help those small
businesses access funds not just at PPP, but very importantly,
our state funds that came through the dollars that were
provided by the Federal Government. So those are just examples
of things that we were doing and continue to do to this day
because the recovery hasn't completed. I mean, we have much
more work to do to lift up communities that have been
disadvantaged and affected by COVID-19 more than others.
Chairwoman Maloney. The gentleman's time has expired. So I
now recognize the gentlelady from North Carolina, Ms. Foxx. She
is now recognized.
Ms. Foxx. Thank you, Madam Chairman.
My questions are going to be for Mr. Joffe. Mr. Joffe,
under the Obama-Biden administration's $800 billion American
Recovery and Reinvestment Act in 2009, or stimulus, there was
extensive oversight and accountability provisions. There was
even the Recovery Accountability and Transparency Board to
provide transparency in relation to the recovery-related funds
and prevent and detect fraud, waste, and mismanagement,
specifically in the law.
Does the American Rescue Plan contain any oversight and
accountability provision similar to the Recovery Accountability
and Transparency Board? And as large fiscal stimulus packages
are implemented, is there a potential for waste, fraud, abuse,
and mismanagement?
Mr. Joffe. The controls seem to me not as strong as they
were under ARRA. There is a reporting requirement for state,
local governments, territories, and tribal entities to
periodically account for what they've spent, but many of those
entities have not been required to report yet. Their first
report will not be due until April 30 of this year.
So some of the money will have been spent and committed, or
much of the money will have been spent and committed without
any documentation about how it's--how it's being spent.
There is the Pandemic Recovery Accountability Committee,
which I think is doing some good work. So there is--there is
some--there is some oversight being conducted, but it doesn't
seem to me to be as complete as what we had under ARRA.
Ms. Foxx. Do you have any insights into why common sense
oversight and accountability measures were not included in the
legislation?
Mr. Joffe. I mean, I have a--I have an educated guess. I
think there was a rush to pass this, and so a lot of the kinds
of bells and whistles and belts and suspenders controls that
would normally go in didn't because it was--it was so rushed.
Ms. Foxx. OK. My next question is Congress passed the CARES
Act in March 2020, now two years ago, to deal with the economic
turmoil and uncertainty at the time. Despite, again, the fact
that the bill was drafted quickly, did it include any
mechanisms to provide for oversight and accountability?
Mr. Joffe. Congresswoman, I'm not as familiar with that. I
believe there were, but I cannot speak to the details of that.
Ms. Foxx. Well, since every CARES Act program falls under
the jurisdiction of at least one oversight mechanism, I think
it is reasonable to expect that the American Rescue Plan would
do the same. Had Democrats worked with Republicans, who were
willing to provide oversight and accountability mechanisms, the
American people might have known how their tax dollars given to
state and local governments were spent.
My last question is the American Rescue Plan Act has an
official price tag of nearly $2 trillion. This is in addition
to the nearly $4 trillion in COVID relief that was spent
before. Can you tell us how this exorbitant spending has fueled
inflation and the higher prices Americans are facing?
I know that the Democrats are trying to blame everything on
high gas prices and Ukraine, but let us talk about how that
spending that was done has fueled inflation.
Mr. Joffe. Certainly. I mean, we have to look no further
than Larry Summers, who's on the Democratic side, who warned
that an oversized stimulus package could be inflationary, and I
think his warnings were prescient. It should really be no
surprise to anyone that we're experiencing the inflation that
we are now, given the excessive amount of spending that was
authorized under ARPA.
Ms. Foxx. And many of us absolutely warned that that was
going to happen and warned that without strong accountability
measures the hard-working taxpayer dollars would be wasted.
Thank you, Madam Chair. I yield back.
Chairwoman Maloney. The gentlelady yields back. The
gentleman from Illinois, Mr. Krishnamoorthi, is now recognized
for five minutes.
Mr. Krishnamoorthi. Thank you, Chairwoman Maloney.
I want to ask a few questions of Governor Pritzker.
Governor Pritzker, before you became Governor, the state faced
a $17 billion backlog of unpaid bills. Correct?
Mr. Pritzker. That's correct.
Mr. Krishnamoorthi. You have eliminated this backlog of
bills, right?
Mr. Pritzker. That's correct. Actually, even before the
ARPA dollars or support from the Federal Government.
Mr. Krishnamoorthi. And before you became Governor, the
state did not have a surplus, right?
Mr. Pritzker. That's correct.
Mr. Krishnamoorthi. And now you almost have a $2 billion
surplus, with surpluses projected for years to come, right?
Mr. Pritzker. Yes, sir.
Mr. Krishnamoorthi. And before you became Governor, the
credit rating agencies downgraded Illinois' credit multiple
times, right?
Mr. Pritzker. That's correct.
Mr. Krishnamoorthi. And now you have seen Illinois' credit
upgraded at least twice, right?
Mr. Pritzker. Exactly.
Mr. Krishnamoorthi. Have you seen a single Governor,
Republican or Democrat, return the ARPA money that their states
received?
Mr. Pritzker. I have not.
Mr. Krishnamoorthi. Are you aware of a single
representative or Senator of either party demanding that their
state or local governments return any of the ARPA money that
they have received?
Mr. Pritzker. No.
Mr. Krishnamoorthi. Let me turn your attention to Connect
Illinois for a second. This is a fascinating program that
expands broadband free of charge to all K through 12 students
in Illinois public schools, right?
Mr. Pritzker. Correct.
Mr. Krishnamoorthi. Why is that important?
Mr. Pritzker. Well, as we all saw during the pandemic, if
you're not connected, it was nearly impossible to get your
homework assignments or to turn in your homework assignments or
to have online classes or to connect with your teacher or a
tutor. We--you know, we needed to expand and speed up.
There were Internet connections, and our schools are
connected, but many of them are slow connections. And more
importantly, outside of school, many people don't have a high-
speed connection to their homes. And so the Connect Illinois
dollars, both at the state level and then the dollars that
we've received from the Federal Government, really have helped
us to accelerate the program that we had in place to make high-
speed Internet ubiquitous.
Mr. Krishnamoorthi. And indeed, I think 40 percent of rural
areas do not have access to high-speed Internet, and so this
was a--and many urban connections lack high-speed broadband
speed. So thank you for doing that.
Let me talk about Back to Business, this B2B program that
you started. Can you talk about a couple stories or at least
one story where this Back to Business program actually made a
material difference for Illinois small businesses?
Mr. Pritzker. Well, I think you're aware that many
restaurants and bars, because there were limits to capacity
that they had to adhere to in order to keep their patrons safe,
suffered throughout the pandemic. And there's a terrific bakery
that I visited, the Blackbird Bakery in Staunton, Illinois,
where a couple had started their business there. It's a very
popular local place. And you know, they really--they raised
their family there, too. Their kids are running around while
they're baking in the back and serving up front.
And they suffered mightily in the early days of the
pandemic. They needed a little bit of help to stay on their
feet, and they got that. And they're back. They're doing very
well, and the family is doing well, too, I might add.
Mr. Krishnamoorthi. Well, they are back to business. That
is exactly what the grant program envisioned.
Let me talk about re-imagining public safety. This is
something that obviously is incredibly important to so many
Americans. I guess, can you talk a little bit about how the
ARPA funds allowed you to reduce significant gaps in mental
health treatment for youth and young adults, who unfortunately
are sometimes in the middle or in the crossfire of firearm
violence?
Mr. Pritzker. Yes. So let me be clear. We have seen an
increase in gun violence across the state in various urban
environments, and that's something that's happened all across
the Nation, I might add. But it doesn't make it any easier to
know that.
We have to address those problems directly. And putting
dollars in this year and in the coming two years, as we have
pledged to do, helps us to support violence interruption
programs, youth job programs, to make sure that we're
addressing the fundamentals of the causes of crime, as well as
our support for police training, for example, and our state
troopers.
Mr. Krishnamoorthi. Thank you so much. I yield back.
Chairwoman Maloney. The gentleman's time has expired. The
gentleman from Wisconsin, Mr. Grothman, is recognized for five
minutes.
Mr. Grothman. Yes, Mr. Joffe, I would like your comments on
a few things as we look at the economic situation right now.
I am not a big fan of Mr. Powell at all, at all, at all. I
wasn't a fan of him under the last administration either. I am
looking right now at a graph of the M2 money supply, and it
shows that in the 1970's, which we think of as kind of the
heyday of inflation, there were times at which the year-to-year
change just got a little bit over six percent, almost seven
percent. More recently, the change in M2, month over, you know,
a year ago, is up to almost 45 percent.
When I tour my local manufacturers, and I have more
manufacturing jobs in my district than any other congressional
district in the country, when I hear of the particularly
dramatic increase in the cost of metals, increase in the cost
of getting things from abroad, almost uniformly my owners of
manufacturing or the people who run those firms feel that
things are only going to get worse.
I would like you to comment on the year-to-year change in
M2 getting over 40 percent and the role increased Government
spending has in that and whether you think we can continue with
these massive increases.
Mr. Joffe. Thank you, Congressman.
I certainly share your concerns. And when the Government
runs large deficits, it has to issue more bonds. And when bonds
are paying negative real yields, it's hard to find private
investors who are willing to buy them. And so the Fed
necessarily has to step up and buy them by printing new money.
And so that is exploding the money supply right now, and I
think the long-term effects are very concerning.
You know, when we had the episode of inflation back when a
lot of us were little kids, it started in the late 1960's, and
it wasn't taken care of really until the early 1980's, and
there was a lot of misery in between. And I'm just afraid that
the current Federal Reserve has really, you know, let the--let
the bulls out of the barn, and it's going to be very, very hard
to bring them back in, you know, with so much money supply
growth.
Mr. Grothman. Do you agree with my manufacturers that
inflation is actually only going to get worse?
Mr. Joffe. You know, it's really hard to project month-to-
month. I think over the next couple of months because of the
gasoline prices, we'll definitely see a worsening. It may calm
down after that, but I think over the long term, unless the Fed
really tightens up, we are destined for much higher rates of
inflation.
Mr. Grothman. And this is, to a certain extent, caused by
excessive Government spending. Correct?
Mr. Joffe. Right. The Fed has to monetize all the debt
that's being created because private investors won't buy it.
Mr. Grothman. Right. Right now, again, when I tour my
manufacturers--and to me, manufacturing is the backbone of any
economy--they are experiencing an across-the-board shortage of
workers for any job whatsoever. Actually, the same thing is
true of retail. Same thing is true of tourism. Same thing is
true of ag.
Do you think now is the time to increase Government
spending or hire more Government workers? Or now, when we have
I think record number of job openings, is maybe the time to
rein in Government spending out of necessity? As a matter of
fact, given all the jobs out there, I can't think of a time in
my lifetime in which it is more demanding of decreasing
Government spending and freeing up some of those jobs for the
private sector.
How do you feel about that?
Mr. Joffe. I agree. I think that the labor shortages in the
private sector are very concerning, and there's really no need
for Government to be competing for able-bodied, competent
people. They can work in the private sector right now.
Mr. Grothman. Do you think now is a good time to maybe cut
back on Government with the economy booming so much?
Mr. Joffe. Absolutely.
Mr. Grothman. OK. One other thing. There has been kind of
an increase in a variety of benefits they are trying to do in
this Build Back Better bill. They have increased SNAP benefits,
President Biden on his own.
We have near record numbers of men sitting on the sideline
not working now, from ages 25 to 55. Do you think any of that
can be attributed to an excessively generous safety net?
Mr. Joffe. Yes. I think when the stimulus checks went out
and the child tax credit was available, and there were other
sources of free money, I think people were--had less of an
incentive to work. And I think we're continuing to pay the
penalty for that.
Mr. Grothman. Thank you, Mrs. Chairman.
Chairwoman Maloney. Thank you. The gentleman yields back. I
now recognize the gentleman from Virginia. Mr. Connolly, you
are now recognized.
Mr. Connolly. Thank you, Madam Chairwoman.
And it is kind of interesting to hear my friend refer to
the economy as ``booming.'' I thought I had heard just earlier
what a mess the economy was under the current administration.
So good to hear it is booming.
State and Local Fiscal Recovery Funds were designed to
prevent a crisis from turning into a depression. As we learned
from the Great Recession 10 years ago, bolstering state and
local budgets in times of great economic hardship can be a key
to recovery.
Today, we have heard the sentiment across the aisle that
dire warnings about state and local budget shortfalls really
were overstated, and actions weren't warranted at all. To that,
I would direct you to the chart on the screen, Slide 8. State
government job losses peaked in October 2020 at 340,000, and we
are still below pre-pandemic levels by 210,000 in mid-2021.
Governor Pritzker, welcome. How have these losses had an
effect, from your point of view, on the delivery of government
services, particularly during Coronavirus peaks and surges?
Mr. Pritzker. Well, I think the first way in which it's
affected things is just the number of people that we've needed
to deliver healthcare services across the state. I'm talking
now about delivering vaccines into people's arms, making sure
that we're providing, you know, access to medical care that
people need. These are all things--we have a Department of
Public Health that is understaffed still, even though we've had
a complete focus on staffing it to the necessary level.
Don't forget that in our Department of Health and Family
Services and in our Department of Human Services, they have
been--had to double or triple the number of people that they're
helping in a variety of areas, mental health being one of them,
substance use treatment, et cetera. And so the idea that we
could provide more and more and more services with fewer people
in state government is just--it's an impossibility. These
things don't go together.
And so the assistance that we got from the Federal
Government in a variety of ways to help us staff up was vital.
And I'll just say as one, I know we're focused on ARPA, but
being able to hire healthcare personnel for our hospitals to
augment what hospitals needed during the omicron surge, which
took us to our highest level of hospitalizations throughout
this pandemic, was vital. And I want to express my gratitude to
you for that as well as for the many other ways in which you
alleviated the burden on state government and allowed us to go
hire people that we needed.
Mr. Connolly. So hardly unwarranted assistance?
Mr. Pritzker. We needed it.
Mr. Connolly. Thank you.
Judge Moore and Mayor Woodards, local governments suffered
even worse than state governments, losing 1.2 million jobs in
May 2020, at the height of the pandemic. By mid-2021, a year
later, we were still short at the local level 500,000 jobs
compared to pre-pandemic levels.
Same question. How has that affected your ability to
deliver services at the county and city levels?
Judge Moore. Well, an example that we are facing in
Kentucky currently is an extreme shortage of State Highway
Department workers.
Mr. Connolly. Did you say Kentucky, Judge Moore?
Judge Moore. Yes, in Kentucky.
Mr. Connolly. In Kentucky?
Judge Moore. In my county.
Mr. Connolly. Yes.
Judge Moore. The State Highway Department informed us that
they had a severe employment shortage and that they were asking
the county to supply manpower and--and equipment to be able to
clean the streets with snow and ice treatment just recently. So
we have contracted for one year to treat state highway roads
with county crews and funds for the next 12 months.
We are being compensated some by the state, but not 100
percent. So then that responsibility falls to the county to
then fill jobs and add personnel to be able to pick up that
additional requirement. And we decided to do it because our
residents often don't know the difference between a county road
and a state road. So we wanted to get services done, and that's
one example.
Mr. Connolly. And would you say that the Federal funding
provided in the various COVID relief bills was helpful to you
in that endeavor?
Judge Moore. I'm not sure where the state is finding the
funds to pay us for that service, but that would have to--
someone would have to dig deeper there.
Mr. Connolly. My time is up, Madam Chairwoman.
I ask unanimous consent to enter into the record a January
survey by MissionSquare Research Institute showing that more
than half of state and local government employees are
considering leaving their jobs because of burnout and heavy
workload because of the pandemic.
Chairwoman Maloney. Without objection.
Mr. Connolly. I thank the chair.
Chairwoman Maloney. Thank you so much. And the gentleman
from Ohio, Mr. Gibbs, is now recognized for five minutes. Mr.
Gibbs?
Mr. Gibbs. Thank you. Thank you, Madam Chair.
I think I want to reflect back a little bit. When this
pandemic started in early spring of 2020, we didn't know what
we were facing. We were facing a virus that society could carry
and transmit and not exhibit symptoms. So we locked down the
economy. We shut the economy down.
And in a bipartisan basis, we passed legislation to get
liquidity out there to businesses and households to prevent a
depression and just a total disaster, and I think that program
has worked pretty well. And then, a year later, the
administration changed, and then we started to come out with
this new package of nearly $2 trillion when there still was $1
trillion unspent from the previous packages that we passed in
2020.
And so now, you know, we have had the supply chain crisis.
We have got a worker shortage crisis. And because those kind of
go hand-in-hand, we saw the economy turn around before we
passed this nearly $2 trillion. Things were getting better. One
of the evidence that things were getting better because nobody
expected demand to pick up the way it did. So we had supply
chain shortages because demand all of a sudden perked up, and I
think we have seen some of that in some of the testimony
already.
And so what has happened, we have got supply chain, worker
shortages. We pay people not to work, pay people to stay home,
and then we put in another nearly $2 trillion in the economy
this time a year ago and to fuel that demand. So the textbook
definition of inflation is too many dollars chasing too few
goods and services, and that is exactly I think what happened.
And then, when you couple that on with this
administration's energy policy, we just added to the
inflationary crisis and all the way across the board, and
putting more money into it, especially without guardrails,
creates a huge problem. And I will give you a couple of
examples, what we saw happen at the local level, at state level
here in--let us see.
The unemployment checks for illegal aliens. In New York
State, lawmakers used nearly $2 billion of this rescue money to
pay illegal aliens. They call it the Excluded Workers Fund.
We also saw another example in Georgia. A surprise holiday
stimulus payment of $6,300 went to medical students. And
according to the Atlanta Journal-Constitution, they also stated
colleges and local governments have occasionally found
themselves scrambling to find ways to spend these funds.
I have seen that back in my state. Privately, I have county
commissioners telling me, hey, we have got a lot of money we
don't know what to do with. Some of them said don't send us
anymore. You know, so I think with what we have done here is we
have funded a lot of wish lists and caused a lot of other
problems.
I would like to say I also see another example. Washington,
DC, Mayor Bowser used $70 million of this allocated state and
local fund to transition homes to green energy. Was that really
help with the pandemic when we have kids who couldn't go to
school, or was this an agenda?
We also had different areas of the county using these funds
for things like why would that affect anything to help these
people? So, Mr. Joffe, would you agree that a lot of this
funding has really been wasted, is really just answering a wish
list that a lot of states and localities had before the
pandemic, and now we just fully funded it? Especially when we
have seen states like California and Illinois that had massive
deficits before the pandemic now have large surpluses?
Mr. Joffe. Yes, it seems that there were a lot of
categories of possible spending--I think about 70 different
categories--and many of them have little or nothing to do with
pandemic relief or revenue loss replacement. So, yes, there are
preexisting wish lists that are being fulfilled.
In California, for example, a lot of the money went to
homeless services, and yes, we've been spending billions of
dollars here in California on homeless services, and we're not
taking care of the homeless problem. So it's not clear to me
how this is really beneficial.
Mr. Gibbs. Would you agree, too, that this massive
inflation that we haven't seen in 40 years--I lived through the
inflation of the President Carter years and how that affects,
adds to costs and people's take-home wages are going down.
Their buying power is going down. And so we should really be
addressing this inflationary cost and how we can address that.
Of course, one reason I think we can address that is by
opening the spigots here and producing energy again, and it
solves a lot of the problems that we are seeing around the
world. But that inflation, would you agree, causes massive
hardships to families, more so than just giving a wishful list
to our local governments, Mr. Joffe?
Mr. Joffe. Yes, definitely. It makes--it makes it harder
for people to make ends meet.
Mr. Gibbs. I thank you. I yield back. I am out of time.
Chairwoman Maloney. The gentleman yields back. The
gentleman from Illinois, Mr. Davis, is recognized.
Mr. Davis. Thank you, Madam Chairman.
And I want to thank all of our witnesses for being here.
And given the fact that I am a proud resident of the state
of Illinois, I want to acknowledge and thank you, Governor
Pritzker, for the tremendous leadership you have provided to
our state during the last three-plus years. And I was, indeed,
pleased and proud to stand beside you on Sunday and with Mayor
Lightfoot at the very impactful Support Ukraine rally held in
my district in a community we call Ukrainian--fondly Ukrainian
Village.
In President Biden's first year in office, the country
gained 6.6 million jobs, by far the strongest job growth record
of any President's first year in office. If we look at the
slide that is on the board, we will see that this chart shows
that job growth has remained strong since passage of the
American Rescue Plan, despite the unpredictability of new
Coronavirus strains.
But as people's everyday lives have changed during the
pandemic, the work force has also been forced to change to
account for new spending patterns. To ensure that businesses
have the work force they need and workers are prepared for
today's opportunities, states and local governments are using
recovery funds to provide training programs for their
residents.
Governor Pritzker, because Illinois is one of the states
leading the way on this, let me ask you how has Illinois
supported work force development with its recovery funds, and
why have these investments been a priority?
Mr. Pritzker. Well, thank you, and I want to thank you for
your leadership, Congressman Davis, and your partnership in
helping us address these challenges.
Workforce development enormously helpful throughout
Illinois during this pandemic as we were trying to, you know,
get people back into jobs that were available. Some of those
jobs came back faster than others, and some of them required
skills development, ``upskilling'' as I would like to say, at
our terrific community college system. And so we made
investments in programs at those community colleges to allow
people to gain new skills to get the kind of job that they were
hoping to get.
We--I heard other congresspeople mentioning the challenges
of there are too many ``help wanted'' signs out there. Well,
that's right. But there are also people who are unemployed who
don't have the skills for those jobs that are available.
So, you know, we have put in place grants for our community
colleges to address those work force needs. For example,
trucking. Helping people get their commercial driver's
licenses. In areas like in electric vehicle development, which
are new jobs, good-paying jobs that are available in Illinois,
and we need people to get the proper skills to take those jobs.
So we've taken some of those ARPA dollars, as well as our
General Revenue Fund dollars, and put them together in order to
create new programs for people to access. And it's really all
across the state.
Mr. Davis. Thank you very much.
Dr. Leachman, are other states making similar investments?
Mr. Leachman. Yes, Representative Davis, they are. The use
of ARPA dollars to invest in people who have lost their jobs,
to help them get back on their feet, to make sure that they
have the funds that they need to meet their basic household
expenses, those are key uses that we're seeing so far for
states and localities.
Mr. Davis. Thank you.
And let me ask you, Mayor Woodards, how is Tacoma using its
recovery funds to support this activity?
Mayor Woodards. Thank you for the question.
We're doing it in a couple of ways. One, I want to be clear
that we are making investments in work force training and
skills development. We have set up two programs in Tacoma that
have been helpful for us. One is a transitional employment
pathway, which is a low-barrier transitional employment
approach to move displaced individuals into part-time work that
is structured and monitored and allows residents to focus on
barrier reduction while transforming--while transitioning back
into the work force.
The other thing I'll just say real quickly is we're also
investing in medical workers, both mental health and nurses, by
providing a free apprenticeship training program for residents
to get into for seven weeks and then take that training that
they've gotten and branch out into other potential
opportunities in healthcare.
Mr. Davis. Thank you all, and I yield back, Madam Chairman.
Chairwoman Maloney. Thank you. And the gentleman from
Pennsylvania, Mr. Keller, you are now recognized.
Mr. Keller. Thank you, Chairwoman Maloney, Ranking Member
Comer, and our witnesses, for being here today.
This time last year during this committee, Republicans
warned Democrats of potential pitfalls with the American Rescue
Plan's State and Local Fiscal Recovery Funds, or SLFRF.
Republicans were not alone. Even President Obama's chief
economic adviser, Larry Summers, cautioned against reckless
spending that the then-proposed funding would be three times as
large as the projected shortfall.
Unfortunately, Democrats ignored all words of caution and
pushed $350 billion through committee after giving Republicans
only 48 hours to review the text. Americans are now living with
the direct ramifications of the Democrats' spending spree, with
inflation topping 7.5 percent.
Mr. Joffe, at the time the SLFRF was passed, had all $4
trillion from the previous COVID funding been spent?
Mr. Joffe. No.
Mr. Keller. How much--do you know how much was still left
at that point in time or----
Mr. Joffe. I think something on the order of $1 trillion,
but I'm not----
Mr. Keller. OK. Does the additional $1.9 trillion Democrats
injected into the American economy correlate with the 40-year
high inflation?
Mr. Joffe. Definitely. I think one thing to point out is
some analogies have been made to ARRA before, but that was
during the recession. The 2009 stimulus was passed during the
recession.
ARPA was passed 11 months after we got out of the
recession. So it was fueling a rocket that had already taken
off.
Mr. Keller. So that caused prices to increase because you
had people with money to spend, and we weren't producing goods?
I mean, I guess I would say that because----
Mr. Joffe. Exactly. We were pumping more money into the
economy, and it was--it wasn't really necessary to stimulate
employment. In the chart that we saw just a little earlier, you
could see that employment was rising steadily after April 2020.
So we had many months of employment growth, and then this came,
and it was something that really was more inflationary than
stimulus.
Mr. Keller. Well, and we would have seen that--I am sure
would have seen that growth regardless of who was in the White
House because we had an economy where nothing was being
produced or almost nothing was being produced prior. So to take
credit for jobs that were coming back simply because people
were going back to work I think is, I guess, the ultimate in
how politics work.
You don't need to answer that one. Just another thing.
Americans are paying more for everything, including gas, energy
to heat your homes, clothing. In retrospect, did the American
Rescue Plan do what the Democrats claimed it would?
Mr. Joffe. Well, it certainly didn't make that much
difference to economic growth, at least the state and local
funds, in mid-2021. Because as I mentioned during my testimony,
only $10 billion of the $350 billion was spent by July 31. So
that money is really long-term money. They have until 2024 to
obligate the money and 2026 to spend it.
So it's just sort of this ongoing padding of state and
local government budgets that in some cases may be needed, but
in most cases aren't.
Mr. Keller. So there is up to another four years to spend
money that was voted on last year?
Mr. Joffe. That's correct.
Mr. Keller. I wonder why politicians would give up to four
years, particularly even-numbered years, to spend money in
economies to prop things up? I mean, particularly during the
middle of a recovery.
I mean, there are two things that happen. There is an
election in 2022, there is one in 2024, and there is one in
2026. Just gives me pause to think why people would support
doing that when we are supposed to be having a pandemic
recovery, which we are, by all accounts--not wearing masks
now--coming out of it. So why would we continue to be spending
money that far into the future unless there were some other
reason to do it? And I can't come up with that reason right
now.
So, with that, I yield back. Thank you.
Chairwoman Maloney. The gentleman yields back.
Unfortunately, I have an announcement. Governor Pritzker
has a hard stop at 12 p.m. because he has pressing business in
the Illinois state government. Members may still submit
questions for the record to Governor Pritzker. We thank the
Governor for his time, and you are excused.
And we now recognize the gentlelady from Ohio. Ms. Brown,
you are now recognized.
Ms. Brown. Well, thank you. Thank you. Thank you very much,
Madam Chairwoman, for holding this hearing.
And thank you to all the witnesses for joining us today.
America's small businesses have faced considerable hardship
during the pandemic, faced with decreased demand and
unpredictable operating challenges. They were forced to cut
hours, lay off workers, decrease production, or shut down
completely.
In late 2020, a Federal Reserve survey showed that about 25
percent of surviving small businesses feared they would not
fully recover without additional assistance, and 57 percent of
small businesses reported fair or poor financial conditions.
According to the National League of Cities, almost half the
Nation's work force is employed by small businesses, and the
success of small businesses hinge on significant engagement by
local government. Mayor Woodards, how are America's cities
using recovery fund dollars to support small businesses, and
can you list some examples of the great work being done?
Mayor Woodards. Right. Thank you, Representative Brown.
So the Federal dollars have supported really the continued
revitalization of our small businesses. Here in Tacoma, we were
able to support our most vulnerable local businesses and
instead of with grants we were--I mean instead of with loans we
were able to provide them grants. These grants went to small
businesses owned by residents not exceeding 80 percent of the
area median income. So these, and with 15 or fewer full-time
employees. And so this means that we were providing support to
our smallest of businesses who struggled the most.
In San Jose, California, I'll give you another example, all
of the large metro cities included NLC--even those that NLC is
tracking, San Jose has the most projects related to small
business support. They are investing approximately $9.1 million
out of their $83.6 million to support local business.
Those are just two examples of what's happening across our
country.
Ms. Brown. Thank you very much.
I also know my constituents are anxious to see recovery
funds put to work as well. Cleveland, a city I represent, has
said it plans to use these funds to increase private sector
financing, access to capital, and access to contracting markets
for minority-owned small businesses and startups. The recovery
funds are also supporting this work at the county level.
Judge Moore, how are counties choosing to support small
businesses with their recovery fund allocations?
Judge Moore. So some examples we have is Howard County,
Maryland. Howard County has allocated approximately $15 million
to address COVID-19 negative economic impacts and $10 million
to fund services for disproportionately impacted communities.
Within those funding categories, the county will focus on
children and families as a key priority to fully address the
breadth of the economic challenges residents continue to face.
Montgomery County, Maryland, supporting a variety of equity
programs, including expanding the Working Families Income
Supplement to financially assist households with children,
allocating $2.9 million to implement holistic and culturally
competent wraparound services for Latino communities in the
county, $1.7 million for African-American health programs,
$1.15 million for an Asian American health initiative, and $3.6
million for health and human service hubs to promote lasting
equity in the county's immediate pandemic response.
Ms. Brown. Thank you very much, Judge.
When Cuyahoga County invested CARES Act funding in its
Small Business Stabilization Fund, it used an equity lens to
ensure that 50 percent of this funding support went to
minority-owned businesses. So, Dr. Leachman, why is equity such
an important consideration as states and localities consider
small business support through recovery investment funds?
Mr. Leachman. Thank you.
The pandemic had very unequal impacts by race and gender
and community, and so our response needs to address those
disparities. That is how we build a strong recovery.
Ms. Brown. Right. Thank you. Thank you for that.
So, clearly, I think we can all agree small businesses are
the backbone of America's economy, and I just look forward to
seeing how recovery funds can continue to support small
businesses and jobs in our community.
And with that, thank you again, and I yield back.
Chairwoman Maloney. The gentlelady yields back. The
gentleman from Texas, Mr. Cloud, is now recognized.
Mr. Cloud?
Mr. Cloud. Thank you, Chairwoman, and thanks for being here
today for this hearing. As has been mentioned, we are seeing
inflation at 40-year highs. Disproportionately, this affects
lower middle class families and, you know, what is tragic about
this, of course, is that it was predictable.
It has been said many people predicted this, including, of
course, former Obama chief economic adviser Larry Summers, who
pointed out that we are spending three times as large as the
projected shortfall.
And so, Mr. Joffe, could you speak to how inflation impacts
families and the disproportionate effect of it upon our
constituencies?
Mr. Joffe. Right. You know, if you don't have a lot of
money invested in the stock market and you are living paycheck
to paycheck, it can be very worrying when gasoline prices, food
prices, and other key staples that you need for your family
keep going up, especially in an unpredictable way.
So it is definitely something that really hurts our working
class and middle class families.
Mr. Cloud. Yes. Some estimates have said it is costing
American families over $250 a month and that, of course, during
this time where we are trying to rebuild our economy is very,
very challenging.
It has been said that, you know, a lot of the spending is--
we are not really fiscally sound right now and it has been said
that if the Federal Reserve is projected--raises interest rates
that our interest spending will surpass our military spending.
Could you speak, generally speaking, to the importance of
sound fiscal policy even as it relates to our national security
and wellbeing as a nation?
Mr. Joffe. Sure.
Well, we have about $23 trillion in federally--in publicly
held debt right now. So if the interest rate on that went up to
five percent, on average, you know, you would be looking at
$1.2 trillion of annual spend, which does exceed the defense
budget by quite a margin.
So, yes, it does have national security implications.
Mr. Cloud. But even in the sense of how great nations rise
and fall, how important is sound fiscal policy to us continuing
to be a strong economy and a premier influence in the world?
Mr. Joffe. Well, I am glad you asked that. I am a student
of Roman history, and if you look at what happened during the
3d century A.D. you can see how the emperors gradually reduced
the precious metal content in coins to the point where they
became almost unrecognizable from what they had been seven--in
years earlier, and the empire collapsed, largely, as a result
of that.
Mr. Cloud. Now, in Washington, DC, politicians often get
away with kind of measuring our personal compassion by how much
of other people's money we give away. I have always thought,
you know, true compassion would be having the due diligence to
make sure that the investments we are making are actually
having the impact that they desire.
You have had some--you put forth some effort in bringing
accountability to the spending, submitting FOIA requests to the
Treasury Department and just trying to get a handle on what is
going on.
Can you speak to that experience and what you have been
able to find?
Mr. Joffe. Well, as I said in my testimony, one thing that
is a huge frustration with the disclosure that we are seeing is
that it is not organized, structured, machine readable data
like Congress envisioned with the GREAT Act of 2019.
So you have just a lot of anecdotal information. You have,
you know, an essay test here and it depends on how the
professor reads the essays.
If you are sympathetic to more government programs and more
government spending, you are going to find the anecdotes in
this mound of documentation that are going to support your
narrative.
But that is not really a rigorous way of looking at the
effect of this program.
Mr. Cloud. So you would say that the data coming forth is
not very transparent, not usable, really, for the American
people to make a good analysis or bring accountability?
Mr. Joffe. Definitely not as convenient and easy to use and
as transparent as it should be.
Mr. Cloud. What recommendations would you have us, as an
Oversight Committee, going forward, as we continue to look at
the spending here and its effects on the American family?
Mr. Joffe. I think we could have more granular
classifications of how the money is being spent. I think that
we should have machine readable data standards for disclosing
that information and the Treasury should, on a real time basis,
update the totals and the details as they come in. That would
provide much more ability for your committee and others to
monitor the spending.
Mr. Cloud. Thank you very much. I yield back.
Chairwoman Maloney. Thank you. Thank you. The gentleman
yields back.
The gentlelady from Florida, Ms. Wasserman Schultz, is now
recognized.
Ms. Wasserman Schultz. Thank you, Madam Chair. As a mother
of three, I have seen firsthand how hard the past two years
have been on young people. Children's lives were disrupted at a
critical time in their development and many still struggle with
depression, anxiety, and stress.
Thankfully, many states, including Florida, devoted state
and local recovery funds from the American Rescue Plan to
various education initiatives, and those investments helped K
through 12 students recover lost ground in the pandemic,
steered financial aid help to help students attend college, and
delivered funds for higher education campuses.
In my district, Florida's 23d, recovery funds hired school
nurses, fed the larger school community, and implemented the
New Worlds Reading Initiative, a free book delivery program
designed to help grade school children achieve their potential
through the power of reading.
Dr. Leachman, we already know that the COVID-19 academic
slide is taking a mounting toll on many students across the
country. How are other states and local governments using
recovery funds to support children who need to make up lost
educational time due to the pandemic?
Mr. Leachman. Thank you.
Yes, this is another important reason why the fiscal
recovery funds are needed now and over the next--over the next
three or four years because that learning loss that so many of
our children have sustained as a result of the pandemic is both
a crucial, important, immediate need that we have to help them
get back on track and it is going to take time.
It is not just one summer school or some tutoring that is
going to recover from what in some cases is a year or more loss
of learning time and, of course, that matters not only for
those kids and their families but for our country's future.
These kids will be tomorrow's work force.
Ms. Wasserman Schultz. In drafting the American Rescue
Plan, Congress recognized the adverse effects in learning loss
the pandemic might manifest--might manifest over months or
years and, subsequently, gave governments until the end of 2026
to spend recovery funds.
Mayor Woodards, why is it extended time horizon so
important when considering investments to support children?
Ms. Woodards. Thank you for the question.
And so there are a couple things. One, we still don't know
and won't know for quite some time the effects of COVID-19 and
this pandemic on our young people.
So a rush to spend that money quickly would be devastating
to all of our communities. We need the time to make sure that
as we recover from COVID that we can make those investments
where they are needed.
It also gives us the time to do a couple of other things--
one, to be innovative, to be creative in thinking about how we
can solve some of the issues that will face our young people in
our communities across America.
And the only other thing that I will add on top of that is
that it also gives us the ability and the time to engage with
our community, which was--which is so incredibly important.
As policymakers, we don't know everything, but being able
to make sure that there is community engagement and relying on
engaging with our residents who have young people or are
actually engaging with our young people as to what their needs
are, being able to take that time and get it right is what is
going to be so incredibly important for most of our
communities.
So having that additional time to address all of those
issues is really important to cities, towns, and villages
across America.
Ms. Wasserman Schultz. Thank you. The very fact that there
will be education concerns and setbacks after the peak of the
pandemic is over makes clear that we must ensure states utilize
every tool at their disposal to support students.
While Florida utilized some of the recovery funds for
student success, we were the last state to apply for the bulk
of the critical education dollars in the American Rescue Plan,
the Elementary and Secondary Education Emergency Relief ESSER
funds, and, distressingly, Governor DeSantis is still refusing
to distribute them.
These dollars would address learning loss, provide access
to critical mental health resources, and offer more staff to
support students' needs. Florida knows that our students in
schools desperately need this funding, which is exactly why
they listed these items in their plan to the Department of
Education months ago.
Dr. Leachman, what long-term impact of delays like these
have on schools, communities, and, most importantly, students?
Mr. Leachman. Well, very serious ones. Already the pandemic
has caused very concerning problems in our schools for our
children's learning. So many kids have had difficulty during
the pandemic receiving schooling and staying on track, and that
is vital for us to address as soon as possible.
The longer we delay the worse it is going to be and the
longer it is going to take for those kids to get back to a
place where they need to be where they can--where they can
succeed in school and----
Ms. Wasserman Schultz. Thank you.
Mr. Leachman [continuing]. Be well in the future. Thank
you.
Ms. Wasserman Schultz. Thank you.
Madam Chair, Governor DeSantis must make these badly needed
dollars available to Florida school districts immediately or
our children, teachers, and local taxpayers will suffer and
bear the long-term burden, and that will rest squarely on his
shoulders.
Thank you. I yield back.
Chairwoman Maloney. The gentlelady yields back.
The gentleman from Arizona, Mr. Biggs, is now recognized.
Mr. Biggs. I thank the chair.
And I am disappointed that there has been some
misinformation coming from the Democrats in this hearing today
as we start considering inflation, and the chair mentioned that
there have been wage increases.
Yes, there have been wage increases. Fortune Magazine, CBS
News, CNN, all point to wage increases. But they all also point
to the fact that the inflation that has been caused by this
particular bill that we are discussing about today has eroded
and actually, basically, superseded any kind of a wage
increase. The only areas where you see that differential is in
restaurants and bars and a few other small sectors.
And why? Because of the baseline effect. It is the baseline
effect that changes this, not the fact that you have--you
haven't--you, basically--let us just face it, you haven't taken
into account the real impacts of inflation here.
And nobody here today has mentioned what inflation does to
fixed income families and households. It is devastating to
fixed income families and households, of which many are in my
district.
So I am kind of surprised that we didn't hear about that.
You know, the classical definition of inflation and, quite
frankly, Ludwig Von Mises said it is the increase in the stock
of money.
That is it. That is what inflation is. An increase in
prices is sometimes an effect of inflation. But when you are a
fixed income family, you really get hammered by inflation.
So let us get back to this bill for a second. And this is
interesting to me because at the start of this bill, you had--
and a lot of people talked about former Obama chief economic
adviser Larry Summers, who said they don't need this. The
states don't need this. They are going to be fine without this.
Jason Furman, also chairman of President Obama's Council of
Economic Advisers, told the Washington Post the state fiscal
relief total in this bill that we are talking about today
exceeds the amount states immediately need.
CBO said that already the states have been coming back and
GDP had risen and was at a pre-pandemic level by 2021 by the
time this bill kicked in.
Others, Manhattan Institute, and the reality is this money
came out anyway. So let us just talk about this. California.
California had a surprising result. What was their result? A
lot of people were able to work from home and the state's
coffers were flush.
So after we gave them more money, they found themselves
instead of having a $27 billion budget surplus having a $75
billion budget surplus. Other states, similarly. New Jersey,
instead of having a small surplus, went to $7 billion. My home
state of Arizona, instead of having a billion dollar surplus,
expanded on that and received, I think, it was $5 billion from
this bill.
Texas went from having a very small deficit contextually to
having just under a billion dollar surplus.
So I guess my question for you, Mr. Joffe, is this. How
many states went from being at budget balance or from a small
surplus to having an even bigger surplus through the bailout to
states in this bill?
Mr. Joffe. I would say that the vast majority of states got
to a point where they had more money than they needed or more
money than their 2019 baseline suggested that they should
expect to have.
So I think it is the vast majority.
Mr. Biggs. So and what was the total amount of impact with
those budget surpluses that were given to most states?
Mr. Joffe. Well, again, in 2021 very little of this money
was spent. So it is really a long-term issue of over the next
four or five years how much of this extra money is going to be
spent for things that, you know, may or may not have anything
to do with the pandemic.
Mr. Biggs. And when you put that kind of money without a
productive or a consumption background to it, primarily without
production creating it and you are just flooding the market, if
you will--the money market with dollars--Federal dollars--what
does that do to the value of the dollar?
Mr. Joffe. It is driving it down and we are seeing that day
by day last year and now this year.
Mr. Biggs. Which is another way of saying you got
inflation.
Mr. Joffe. Yes.
Mr. Biggs. Thank you. I yield back.
Chairwoman Maloney. The gentleman's time has expired.
The gentlelady from Michigan, Ms. Tlaib, is recognized.
Ms. Tlaib. Thank you so much, Chairwoman and thank you so
much for our panelists for being here.
Mr. Raskin. I would like to submit for the record a written
statement by Mayor Vince Williams of Union City, Georgia, who
serves as the president of the National League of Cities.
Chairwoman Maloney. Without objection.
Ms. Tlaib. We all know the American Rescue Plan's local
fiscal recovery fund, Union City qualifies as, quote, ``a
nonentitlement unit of government,'' or I think some would
refer to as NEU, which is, generally, a city or a town or a
village of less than 50,000 residents.
So, Mayor Woodards, since you work closely with Mayor
Williams, can you tell us what the recovery funds have meant to
the Nation's NEUs?
Ms. Woodards. Absolutely. Again, thank you for the
question.
You talked about Union City already. But let me share with
you Cheney, Washington, a city right here in my own state, a
city of just more than 12,000 residents.
The City Council approved a $50,000 grant to help with
rental assistance as the current eviction moratorium was
extended and is set to expire at the end of October.
Many families fall behind on rent nationally due to job
loss and reduced hours, and the SLFRF funds allow the community
to ensure that residents who struggle to pay their rent would
not lose their home.
In Henderson, North Carolina, the city has designated $1
million of its money from the American Rescue Plan to not--to
give to nonprofit organizations serving the Henderson area.
Two hundred and fifty thousand dollars will be awarded to
nonprofits each year over the next four years through an
application process, and we know that a lot of our CBOs--
community based organizations--and nonprofits are on the front
line delivering the many services that are most needed during
this time.
Ms. Tlaib. Thank you so much. I know Mayor Woodards--I
mean, while I was proud to, obviously, help authorize the
historic relief effort, I was concerned to see, you know,
especially my NEUs' allocations would be first sent to the
states, who would then distribute the funds to our smaller
cities.
And so, Dr. Leachman, you know, why were the recovery funds
dispersed in this way?
Mr. Leachman. Well, it is just an administrative challenge
for Treasury to deliver funds to thousands of towns. This is
the way that it works in the CDBG program, the Community
Development Block Grant Program, so they have that sort of
structure to go to states and then out to these smaller places.
You know, I would say that states have--I understand that
they have distributed 95 plus percent of the funds to NEUs with
some--with the exceptions just being because for a variety of
reasons that a little town isn't able to respond, they may have
been annexed--the town officials may be understaffed or facing
other challenges.
Ms. Tlaib. Sure. You know, and I know that--you know, this
makes sense. But I also think there should have been a limit to
how many extensions states could request to provide small
cities with their rightful allocations.
For example, you know, Treasury documents show that the
state of Michigan requested at least eight extensions, which
really impacted, again, my local communities that really were
the ones who lacked the most capacity to crush this virus.
And I know the American Rescue Plan was a historic endeavor
to provide relief to our local governments. Unfortunately, when
the critical allocations were delayed, it is our small town
residents who suffer the most. You know, most of my
constituents in Romulus City, Ecorse, Garden City, Wayne,
Inkster, they really deserved us to move with that urgency.
So I also wanted to touch, you know, based on the
flexibility of the funds. You know, the minority witness has
previously, you know, claimed that the recovery funds have,
quote, ``so many strings attached'' as Congress limit how state
and local governments would--you know, could allocate aid in
various ways.
But, Dr. Leachman, would you call the ways the funds can be
spent, quote, ``limited?''
Mr. Leachman. No, I wouldn't characterize the funding as
being particularly limited or having a lot of strings. It is
really quite flexible and Treasury's guidance has made it even
more so.
You know, anything that counts under the revenue loss
provision can be used for government services. You can use the
funds to address the pandemic and its negative economic effects
defined in a way that gives governments room to really evaluate
the circumstances in their local environment and do what is
best.
And the final rule that Treasury has set up the rule so
that when funds are targeted to lower income communities or
communities that have been particularly hit hard that
recipients have a wide range of options of use in those areas.
Ms. Tlaib. Thank you.
You know, Mayor Woodards, have you found that there aren't
enough eligible uses that weren't funding in Tacoma or has your
experience been that there isn't enough funding to meet all
your city's eligible demands?
Ms. Woodards. Definitely not. As I talk to mayors across
the country and I have heard the conversation today about their
surpluses, I don't know anybody talking about they have extra
money. We are still struggling to provide all of the services
that are needed coming out of this pandemic.
Ms. Tlaib. Absolutely. Yes, it takes time. So thank you
again, Chairwoman, for this hearing, and I yield.
Chairwoman Maloney. The gentlelady yields back.
The gentleman from Kansas, Mr. LaTurner, is now recognized.
Mr. LaTurner. Thank you, Madam Chairwoman.
My colleagues have called this committee hearing to attempt
to draw a causal relationship between the American Rescue Plan
and any economic growth that occurred in 2021 following the
early days of the Coronavirus pandemic. The truth is that the
American Rescue Plan Act and its flawed disbursement formula
turned into a $350 billion slush fund, and rural communities in
my home state of Kansas received fewer Federal aid dollars per
capita, while Democrats, mayors, and Governors who chose to
implement crippling lockdowns were rewarded with large slush
funds.
Adding insult to injury, Kansas is now among the states
that are experiencing the greatest fallout from the bill with
inflation rates higher than the national average.
Over the course of 2021, prices in Kansas rose by about 7.6
percent, outpacing the national average inflation rate of 6.8
percent.
Countless economic experts on both sides of the aisle
warned that this reckless spending would have a significant
inflationary impact. But the Democrat majority failed to heed
those warnings and now hardworking Americans are paying for
that mistake.
My colleagues on the other side of the aisle often talk
about helping the working class. But that is exactly who feels
the pain of inflation. One year ago, a Kansan could buy a
gallon of gas at just over $2.50. Today, that price has risen
to $3.38 per gallon with no end in sight to the increase, and
it doesn't stop there.
According to the Bureau of Labor Statistics, the cost of
eggs is now 11 percent higher and milk is 9.2 percent higher.
My state is facing the highest inflation we have seen since the
1980's and my working class constituents are the ones who are
hurt the most.
As a former state treasurer, I understand the value in
helping state and local governments implement changes that the
Federal Government has mandated, and at the time that ARPA was
passed, I implored the Biden administration to responsibly
allocate the $1 trillion in COVID relief already provided for
by Congress.
Unfortunately, Democrats authorized trillions of dollars of
wasteful deficit spending that, ultimately, had little to do
with pandemic recovery and which disproportionately impose the
consequences of the resulting inflation on my constituents.
Mr. Joffe, the Democrat-stated purpose of this hearing is
to explore how the American Rescue Plan contributed to low
unemployment and record high GDP. Yet, the Congressional Budget
Office released a report prior to ARPA's passage that GDP would
return to pre-pandemic levels without any new congressional
stimulus package.
In your view, to what extent is there a causal relationship
between ARPA passage in March 2021 and the growth in national
GDP?
Mr. Joffe. I think it is fairly limited, as you stated. CBO
and many other experts already noted that the economy was
bouncing back very smartly from the recession. So this added
stimulus at the wrong time in the business cycle. It was really
very sub-optimally spent.
Mr. LaTurner. I am going to stick with you, Mr. Joffe.
There is a lot of concern on the Republican side that $350
billion of ARPA was used mainly as a rainy day fund for a lot
of institutions.
Here in D.C., for example, Mayor Bowser used $70 million
dollars to transition homes to green energy. Now, we can debate
the merits of that project, but it hardly falls into the
category of pandemic-related expenses.
I am concerned about the unsustainable debt burden that
Congress is placing on the backs of our children and
grandchildren with these sweeping spending bills, which is why
I co-sponsored a balanced budget amendment earlier in my
service as a representative.
Can you discuss the broader impact of ballooning our
national debt, which just exceeded $30 trillion, and the threat
that publicly held Federal debt poses to our economic future?
Mr. Joffe. Yes, definitely. Because this publicly held debt
has become so large, now over 100 percent of GDP and, of
course, the total government debt is well over 100 percent of
GDP, this really is a systematic threat to budget stability.
If interest rates return to normal levels, if, for example,
we get to the point where interest rates match the inflation
rate, that is going to blow a giant hole in the Federal budget
and it will be at a time when it will be very difficult for us
to borrow more money because financial markets will be losing
faith in America's ability to and willingness to repay its
debt.
Mr. LaTurner. One more quick question. In your testimony,
you discussed the limited effects of the pandemic on state tax
revenues and compared those findings to Census Bureau data. Can
you explain how you came to your conclusion and elaborate on
your findings as quickly as you can?
Mr. Joffe. The census does a quarterly survey of state and
local revenues and I was basing it on that.
Mr. LaTurner. Appreciate it. Thank you, Madam Chair. I
yield back.
Chairwoman Maloney. The gentleman yields back.
The gentleman from Maryland, Mr. Sarbanes, is now
recognized.
Mr. Sarbanes. Thank you very much, Madam Chair, for this
important committee hearing. As we have been hearing, the
American Rescue Plan provided critical resources to help
communities stay strong, to recover from the Coronavirus
pandemic.
In my district, for example, these funds are helping to
hire and retain school bus drivers in Anne Arundel County,
expand broadband access in Baltimore City, provide rental aid
and food distribution in Montgomery County. So it has really
been felt positively across my district.
As members of the Oversight Committee, we work, as you
know, to identify and prevent waste, fraud, and abuse of
taxpayer dollars, and we have to balance this effort to get the
aid out broadly and as flexibly as we possibly can, on the one
hand, with accountability for how those dollars are spent, on
the other hand.
And in the state and local fiscal recovery funds there are
safeguards that were put in place to make sure that these
investments--these historic investments--are being made wisely.
Judge Moore, what must states and local governments do to
receive their allocations? In other words, what did they have
to present in order to have those moneys flow?
Judge Moore. Thank you for that question.
You know, one of the things, I think, that we maybe have
missed is that, you know, the final--the final Treasury standup
did not happen until May 10 of 2021.
Counties had the opportunity until August 31 to identify
projects, and if you identified and you certified for those
funds by July 15, by the way--so if you certified by July 15
you had a report due on August 31.
Many of our counties across the Nation were still waiting
for states to stand up their programs so that they would know
what was being--what opportunities might be funded by state
funds through ARPA versus using their direct allocation.
For that reason, not a large number of counties had
submitted their request for funds or their--or their plans. So
I think that is part of why we are seeing some small numbers in
that first report.
However, since then, 99 percent of all counties have done
so and have their first half of their allocation. We know that
counties with populations of 250,000 or more are required to
post on their websites what they are using the funds for.
So when we think about transparency, that is a component
that, I think, is very important, and many other counties are
doing it willingly on their own, listing what their funds are
being used for.
One of the things that occurred to us was that during the
negotiations with the $360 billion, when the local--$350
billion--when the local aid dropped out, the total bill
spending did not go down. The $350 billion did not increase the
overall passage of the bill, according to our legislative
leaders.
So I would suggest that decisions made at the local level,
closest to the people, were the most efficient, and I think as
we see this play out through the years we will find that these
counties made wise investments into their community.
They are very broad. In some cases, it is more about work
force. It may be about childcare. In other communities it is
infrastructure based.
But I think that indicates that the flexibility at the
local level and especially in the $10 million exemption for
lost revenue, that we will find that communities allocated the
funds best suited for their local community where they are
elected by the people and where they know that community best.
Mr. Sarbanes. Thank you for that description of the
process. I mean, obviously, combining flexibility in terms of
where the funds can flow, on the one hand, with accountability,
as I said, is important.
You indicated there is an initial certification of need
that has to be presented, and then the states and localities
have ongoing compliance reporting that they have to do to
demonstrate how these funds are being spent.
And I understand as well that there is a community input
component that the states and localities, in particular, are
being asked to assess the communities' feeling about how these
investments are being made.
Mayor Woodards, briefly, because we are running out of
time, why is it so important that governments are accountable
not only to Congress but also to their communities when they
make these expenditure decisions?
Ms. Woodards. Well, I think as I just mentioned earlier,
that nobody knows their needs better than those who have them.
So our ability to engage with our local communities to assess
and to be really clear about what is important to them, just
like you give the authority to us to make the decisions because
we are closest to those, then we then pass on that opportunity
to engage with our communities to make sure that we are
providing the right programs and services to address their
needs.
Mr. Sarbanes. Thank you very much. I yield back, Madam
Chair.
Chairwoman Maloney. The gentleman yields back.
The gentleman from Georgia, Mr. Clyde, is now recognized.
Mr. Clyde. Thank you, Madam Chair.
One year ago, President Biden and his Democrat colleagues
recklessly pushed through the American Rescue Plan, a $1.9
trillion spending package which they claimed was for COVID
relief. The spending package came after Congress had already
passed $4 trillion in COVID relief, $1 trillion of which had
not yet been spent.
Both President Biden and the Democrats chose to ignore the
warning that this spending package would only fuel the
inflationary fires. This spending package also gave $350
billion directly to state and local government without proper
guardrails in place to protect against waste, fraud, and abuse.
After this $350 billion was recklessly handed out, we have
seen countless instances where this money has not been used for
its intended purpose. These funds were intended to be used to
respond to the woes of the pandemic.
But we have seen that pumping billions of dollars of free
money into the economy simply drives hyperinflation.
Mr. Joffe, thank you for your testimony today. We are
seeing record rates of inflation higher than any point in the
past 40 years.
Can you tell me, in your estimation, how long do you think
this runaway inflation might last?
Mr. Joffe. I think it could go on for many, many years
because Federal Reserve interest rates are now well below the
inflation rate and I think they are very worried about raising
interest rates too much because of the fear of its effect on
the stock market and economic growth.
So if the Federal Reserve continues to follow this low
interest rate policy we could see many, many years of
inflation.
Mr. Clyde. Wow. Thank you. That is not good news. But thank
you for that that testimony.
Congress gave $350 billion to states and localities.
However, we do not know whether these billions of dollars went
to Americans in need.
Dr. Leachman, you said that the American Rescue Plan funds
were not distributed fairly based on need and you defined that
as race, gender, and community, I believe.
I understand you to say that minorities were
disproportionately affected and, therefore, they didn't get
their fair share. Is that correct?
Mr. Leachman. No, sir that is not what I said.
Mr. Clyde. OK. Well, you made a comment--that I heard it
twice in your testimony.
Mr. Leachman. Excuse me. My point was that the pandemic and
the economic impacts have been felt disproportionately in
certain communities and unequally by race, gender, and
community.
Mr. Clyde. OK. And the American Rescue Plan did not then
distribute the moneys in that way. Is that correct?
Mr. Leachman. No, sir. The American Rescue Plan was
designed to distribute its funds based--to states based on
unemployment, which is a good measure of hardship, given that
it is measured--we have data monthly----
Mr. Clyde. OK.
Mr. Leachman [continuing]. And at the city and county level
based on a combination of population and poverty.
Mr. Clyde. OK. Thank you for that understanding. I
appreciate that.
While Republicans were not able to see the American Rescue
Plan's complete text until 48 hours before the markup of the
bill, we are--we were still able to offer common sense
amendments to try and protect American taxpayer dollars from
misuse.
However, Democrats in this committee refused to adopt any
of these amendments to allow for guardrails to be in place. So
in the ARP I noticed that the city of D.C. received $3.3
billion of funding and I am--and I also saw that $70 million
dollars of which was used to convert homes to green energy.
So I am certain that when Congress acts next term--that
would be the 118th--to realign the government of Washington,
DC, back to the Constitution's original intent of Article One,
Section 8, Clause 17, that $3.3 billion dollars will have the
appropriate guardrails under the jurisdiction of this
committee.
And with that, I yield back.
Chairwoman Maloney. The gentleman yields back.
The gentlelady from California, Ms. Porter, is now
recognized.
Ms. Porter. Thank you. We have a childcare crisis in this
country. One of the biggest challenges for working families
over the past few years has been the rising cost of childcare,
and the pandemic has led to the permanent closure of thousands
of daycare facilities across the country.
I want to play a short clip from CBS News about the closure
of a childcare facility in Billings, Montana, that served about
a hundred kids.
[Video.]
Ms. Porter. This same story is playing out across the
country. A 2021 survey found that four in 5 daycares were
understaffed and 78 percent said low wages were a contributing
factor.
Dr. Leachman, how can the recovery funds be used to help
address the childcare crisis?
Mr. Leachman. Thank you, Representative Porter.
The lack of affordable quality childcare is just a huge
problem, as your powerful video showed. It is just, for one
thing, making it just much more--much harder for people to get
back into the labor market, and the underinvestment in
childcare has made it inaccessible and unaffordable for
decades.
So the fiscal recovery funds can really help to help
providers to get back on their feet. Some have been forced to
close, and to meet the need that is out there to provide
quality and affordable care it can also be used to help make
childcare more affordable to parents.
Of course, because of the time horizon on these funds it is
a temporary measure only and doesn't obviate the need for long
term Federal investment in expanding access to affordable
quality childcare.
Ms. Porter. And my understanding is that the final rule on
expanded clarified--excuse me, the interim final rule clarified
that childcare workers are eligible for premium pay through the
recovery funds.
Judge Moore, the National Association of Counties has
highlighted some great projects to address the childcare
crisis.
In my city, Irvine, we have a wonderful partnership between
the school district and the city and nonprofit providers. It
leases facilities on elementary school campuses to nonprofit
agencies to provide childcare for about 2,000 children and my
own family is one that has used this service for care. My
daughter, Betsy, still goes to these care centers.
Can you highlight a few of the projects that you are aware
of that address the childcare crisis?
Judge Moore. Well, the childcare crisis is a huge issue,
especially in the--in regard to work force development
shortages and worker shortages.
In San Diego County in California it allocated $16 million
to implement a new pilot program within local schools and
universities to provide apprenticeship services work force
development for early childhood educator professions.
This funding also supports continuing education and
increased wages to promote staff retention for educational
professionals. Travis County, Texas, also, $2.5 million for
child care assistance. York County, Pennsylvania, $1 million
distributed over 30 organizations to support early childhood
development, and there are other examples.
Ms. Porter. I think what we are seeing here is that
municipalities and cities, counties, across the country are
telling us with their choice of how to use these funds that
childcare is one of the biggest needs.
It is a social justice issue to make sure that we value
child care workers but it is also fundamentally an economic
issue. Whether you have children or not, every American
benefits from a strong economy and every business, small and
large, benefits from having the workers that it needs to stay
productive.
So I encourage Congress, both sides of the aisle, to
continue to invest in childcare.
With that, I yield back.
Chairwoman Maloney. The gentlelady yields back.
The gentleman from Louisiana, Mr. Higgins, is now
recognized.
Mr. Higgins. I thank Chairwoman Maloney and Ranking Member
Comer for having this hearing today.
Madam Chair, I have been listening to the testimony of my
colleagues and the witnesses here today. Here is the glaring
message. We don't have the money. We are mortgaging our
children, our grandchildrens', our great grandchildrens',
future.
Congress is mortgaging the future of generations yet
unborn. We are $31 trillion in debt. If this body were to run a
$1 billion surplus, which it will not do, without some serious
conservative adjustment--if this body were to run a $1 billion
surplus, it would require 31,000 years to address a $31
trillion debt.
Shifting to the pandemic and the money that we have spent,
since March 2020, America has spent $6 trillion just on COVID.
That is six thousand billion dollars. That would be $120
billion for every sovereign state, or broken down by working
families, according to the 2020 Bureau of Labor and Statistics,
just over 83 million American families had at least one member
of the family employed.
Every working family could receive $70,000 in cash tax
free. You think maybe that would have helped American working
families? America, would you like to receive $70,000 in cash?
Because Congress has, certainly, spent that money and it is
your money. There is no such thing as Federal money. Every dime
that gets spent out of this body is seized from the paycheck of
a working American.
We are speaking in platitudes here today. In this committee
that is responsible for oversight for government expenditure,
my colleagues across the aisle are in a fantasyland. We don't
have this money.
Talk about childcare and child welfare--good Lord, what
kind of a family would dump unserviceable crippling debt upon
their yet unborn great grandchildren in order to have, you
know, solar panels on your roof right now?
Some of us are quite passionate about actually preserving
our republic and restoring our constitutional rights and
freedoms and restoring fiscal responsibility to this body.
And Congress talks about trillions of dollars like it is
nothing saying. It is insane.
Mr. Joffe, let me give you my remaining time, so a couple
of minutes. Just please address, if you don't mind, exactly
what kind of actual long-term economic impact these very poorly
written and loosely corralled massive spending bills that get
pushed through Congress--what is the impact long term on the
American economy for generations to come?
Mr. Joffe. Well, you know, as you said, Representative
Higgins, we didn't have this money to spend, and so it is a
combination of printing it up and destroying the value of the
dollar and then--or borrowing it and putting it on future
generations and both of those have serious long-term effects.
You know, we are now getting into the period where most of
the Baby Boom generation is retiring. That is going to put a
lot of pressure on Social Security and Medicare expenditures
through the rest of the 2020's and the 2030's, and we just
don't have the gas in the tank right now to finance that sort
of thing.
So it is very worrying. I do agree with you that Congress
should be a lot more careful with how taxpayer money is being
committed.
Mr. Higgins. When the CARES Act was written, which my
office participated in--we helped launch the CARES Act--that
was a couple of weeks of sleepless nights, bringing 4,500
community banks and credit unions online to serve this SBA
product that they had not prior. We had heavy guardrails on the
CARES Act, which I supported. That was a time we weren't quite
sure what this pandemic was going to be. But it required
action.
But since then, we have learned a lot about this virus and
we have also seen a lack of guardrails on new spending. Would
you agree with that assessment, Mr. Joffe?
Mr. Joffe. Yes, I would.
Mr. Higgins. Thank you, sir. Thank you for appearing, to
all our witnesses today, and Madam Chair, I yield.
Chairwoman Maloney. The gentleman yields back.
The gentlelady from Illinois, Ms. Kelly, is now recognized.
Ms. Kelly. Thank you so much, Madam Chair.
As vice chair of the Energy and Commerce Committee and a
member of the Subcommittee on Health, I am very concerned about
expanding access to health care and advancing the health of
vulnerable communities across this country.
I was encouraged to hear that the majority of states and
localities that were required to submit initial reports decided
to invest their recovery fund dollars in public health to
prevent and mitigate the spread of the Coronavirus.
We heard from my Governor, Governor Pritzker, earlier today
that Illinois is one of those states. Our state has
appropriated $786 million for a wide range of public health
needs including support for vaccinations, testing, contact
tracing, long-term care services, mental health rehabilitation
facilities, and hospitals.
As chair of the CBC Health Brain Trust, it was clear that
there was a divide between white and minority communities early
in the pandemic.
President Sharp, indigenous Americans suffered higher
Coronavirus infection and death rates than other populations,
especially at the onset of the pandemic. What public health
impacts would tribes have experienced if Congress had not
passed the recovery funds?
Ms. Sharp. Yes, thank you for that question.
The impacts would have been devastating. As I mentioned in
an initial question, we are disproportionately impacted and
already vulnerable prior to the pandemic.
As evidenced in the U.S. Commission on Civil Rights Report
called the Broken Promises Report that was delivered to
Congress in 2018, that report detailed on every sector--
education, health care, even our business and private sector
economies--have been chronically and long-standing underfunded.
We can only dream of having the resources and opportunity to
even get to a base level of providing for our citizens.
But with this investment, we are not only able to meet the
needs but now we are in a position to look long term to make
strategic investments in our communities and where things like
broadband--there is a community in Alaska, the Akiak tribe,
invested in broadband to service the second largest broadband
gap in the United States and that means being able to access
telehealth. That means education for children. These are key
strategic investments that have kept us away from just being at
a basic level of existence for decades, if not generations.
Thank you.
Ms. Kelly. Thank you. So that sounds like something that
you are doing that could be a promising public health program
or project that may be a model for other areas in the United
States in regard to reducing health inequities.
Ms. Sharp. Yes.
Oh, yes, I was just going to say yes, absolutely, because
public health is not, like, just the, you know, doctors and
nurses. Public health is mental health. It is having an economy
and educational opportunities.
Ms. Kelly. Early reviews suggest that almost three-quarters
of metropolitan cities and counties are investing in recovery
funds and public health.
Mayor Woodards, what are some of the best ways cities are
using their recovery fund allocations to support public health?
Ms. Woodards. Well, I stated in my opening comments a
little bit about what we are doing here in Tacoma as we talk
about supporting our homeless community in terms of providing
shelter and case management.
There is an opportunity there that we are using to provide
more mental health services directly to those impacted.
I would also say that in Houston, Texas, they are funding a
clinician officer remote evaluation program, which is a
telehealth strategy for responding to behavioral health crisis
calls.
So when an officer--when there is a contact made with law
enforcement, they can immediately call a mental health
clinician at the time of the 911 dispatch to provide
appropriate intervention. So they use real-time on-the-ground
innovative solutions.
Ms. Kelly. Thank you.
And, Judge Moore, talk about the best ways counties are
using their funds and would you comment on are counties and
cities with their programming complementing each other?
Judge Moore. Yes, thank you for your question.
Hamilton County, Ohio, which is Cincinnati, just to the
north of my county, they allocated $5 million for a community
outreach for vulnerable populations to ensure health and social
service information is more effectively provided to underserved
populations in their county.
This program will include acquisition, programming, and
marketing for permanent tech bus and ongoing outreach to
educate minority and underserved populations to improve health
outcomes.
In Louisville, Jefferson County, an initial $30 million in
ARPA funds were allocated to address urgent needs related to
the pandemic.
Of those funds, $15 million was allocated for COVID-related
public health expenditures, $9.8 million for COVID-19 response
and vaccination activities, $1.5 million for childcare center,
emergency, and surplus supplies, and so on.
So across America, we have examples of the large urban
counties investing their funds in the area of public health.
And I should say that this funding is historic to rural
populations--to rural counties across America.
While I don't have exact examples here, we know that our
rural counties across the Nation have received these funds and
that they have exciting plans for their funding.
Ms. Kelly. Thank you. My time is expired.
Chairwoman Maloney. The gentlewoman's time has expired.
Thank you.
Ms. Kelly [continuing]. To this committee. Thank you.
Chairwoman Maloney. Thank you, and the gentlelady yields
back.
And the gentlewoman from Massachusetts, Ms. Pressley, is
recognized.
Ms. Pressley. Thank you, Chairwoman Maloney, for convening
today's hearing about the unprecedented relief provided in the
American Rescue Plan.
As we approach the two-year mark since the onset of the
pandemic, we have to be candid about its disproportionate
impact on the lives of Black, brown, indigenous, immigrant, and
low income communities.
The American Rescue Plan put forth by the Biden/Harris
administration and passed by Democrats in Congress, was a
lifeline for families across the Massachusetts 7th
congressional District, and because we were intentional in
centering equity, states had adequate flexibility to prioritize
lifesaving resources to our hardest hit communities.
Cities like Chelsea, Everett, and Randolph in my district
were among the most severely impacted communities and they
needed additional relief, regardless of esoteric funding
formulas, to support their necessary recovery from the
pandemic.
That is why I, along with Senators Warren and Markey,
repeatedly called on our Governor to use this flexibility to
ensure equitable distribution of more than $5 billion.
Dr. Leachman, how did Congress and the Treasury Department
structure the recovery funds to allow state governors to
address the inequitable impact of the pandemic?
Mr. Leachman. Thank you for that question. It is very
important.
So the act itself emphasized that the funds were to be
available to address the impact of the pandemic and its
negative economic impacts, and the Treasury guidance has been
very clear in encouraging states and localities and tribal
governments and U.S. territories to spend to spend funds in
ways that that address the inequities that the pandemic made so
apparent. They have been invisible for us to see but the
pandemic made them especially apparent.
And so what Treasury guidance has made clear and encouraged
states and localities and other recipients to do is to focus on
those communities that are hardest hit and address the
disparities that will help--by addressing those disparities
will--that is the only way we can really recover.
How can the community--if the communities that have been
most hard hit aren't recovering because we aren't investing
properly and then how can we really call that an effective
recovery?
Ms. Pressley. Thank you, Mr. Leachman.
And could you just speak to the reporting aspect of that so
just in terms of, you know, that oversight and that
accountability? So we gave that guidance. But what were the
guidelines in terms of Treasury's reporting to make sure that,
in fact, the funds were equitably distributed and going to the
hardest hit and impacted communities?
Mr. Leachman. Sure.
Well, each recipient--each state recipient and larger
cities and counties have to submit an annual performance report
that details a number of facts about their spending of their
funds, including details about each project and their use of
funds for--in that detailed level.
They also have to describe the impact on equity and the
community engagement process that they used when determining
how to spend the funds, both of which can work together to make
sure that the funds are allocated in ways that address
community needs, especially in the communities most impacted,
and that the recipients are thinking about the longer-term
impacts on equity so that we cannot repeat the same problems in
the future.
Ms. Pressley. Exactly. And, in fact, in my district, the
Mass. 7th, investments with the American Rescue Plan were
used--directed toward community health centers who were
critical in combating health disparities, affordable housing,
free transit, bonus payments to low income essential workers
who risked their lives during the pandemic and showed up for
their community, folks like grocery store clerks and bus
drivers.
Mayor Woodards, how are you and other mayors across the
country--I have heard some of your testimony but if there is
more you would like to unpack--how do you use recovery funds to
ensure that people who are disproportionately vulnerable to
Coronavirus and economic hardship are specifically and uniquely
supported? Is there anything you would like to lift up?
Ms. Woodards. Yes. Sure. Just so a couple things that I
would like to talk about.
So one, in terms of the fact that we could use some of our
money to support our rental assistance. Here in the city of
Tacoma, we had an opportunity to partner with a BIPOC nonprofit
to get that money out the door, and because we partnered with
them, we were able to allocate over 50 percent of our funding
directly to BIPOC community members for rental assistance.
I would say that in other cities, Los Angeles has created a
fund called LA REPAIR and it gave grants to support job
creation and organizational support and community intervention
on racial healing and justice work, again, focused on our BIPOC
community.
So I have lots of other examples. But those are just a few
additional examples of how we are focused on those who need it
the most.
Ms. Pressley. Thank you.
Chairwoman Maloney. The gentlelady's time is expired. Thank
you. The gentlelady yields back.
The gentleman, the ranking member of the committee, the
gentleman from Kentucky, Mr. Comer, is now recognized.
Mr. Comer. Thank you, Madam Chair.
You know, Republicans voted against this American Rescue
Plan because we knew that when the government prints more money
you are going to have more inflation.
Now, we will all be able to celebrate projects that were
funded with this that were beneficial. But there are going to
be many, many horror stories about wasted money and I will get
to that in just a moment.
But, Mr. Joffe, I want to talk about another bill, because
when you look at this $1.9 trillion that we are talking about
here, this came on the heels of trillions of dollars passed for
stimulus at the end of the Trump administration during the
beginning of COVID, and then after this another several
trillion dollar infrastructure bill.
Now, Mr. Joffe, historically, from my studies in history
and economics, the government passes spending to stimulate the
economy. But we had an economy--and Republicans kept saying
this--that was on fire from stimulus that had been appropriated
from Congress prior to this.
So we are historically--wouldn't you say that if and when
the government stimulated the economy it would be at a time
when the economy was sluggish and at a time when there was a
high unemployment rate? Did we have a high unemployment rate
when this $1.9 trillion was passed?
In other words, do you think that this $1.9 trillion was
needed to stimulate the economy or, I guess, and also how much
do you think this contributed to the current inflation we are
seeing now?
Mr. Joffe. I think it is the direction that you have to
look at. So employment was rising rapidly at the time that this
was enacted. So it really wasn't necessary.
Now, certainly, unemployment was still higher than it was
before the pandemic, but because the economy had already
developed a head of steam we didn't really need this.
And, you know, to your point about the infrastructure bill,
Congressman, I just want to point out that a lot of the wins
that have been presented here have to do with state and local
government spending money on broadband. But that is also in the
infrastructure bill as well.
So you have a lot of duplication of effort across these
bills and, naturally, you are going to have a lot of waste.
Mr. Comer. The reason that I was concerned about an
infrastructure bill when we passed it, I don't feel like we are
going to get a lot of infrastructure.
I don't feel like we are going to get a lot of roads and
bridges for the amount of money we are spending because we have
massive inflation right now.
What the administration should have done is tried to get
inflation under control and then see where the government
needed to step in to help with infrastructure.
So I think the American people are going to be very
disappointed, at the end of the day, when they see how little
infrastructure is going to be constructed considering the
massive amount of money that was spent.
Now, I want to ask some questions of my good friend, Judge
Gary Moore. Boone County, the fastest growing county in the
state of Kentucky, a real success story.
I have to respond again to Mr. Connolly. I have a lot of
respect for Mr. Connolly but sometimes he competes with Adam
Schiff for the most misinformation a single day as a Member of
Congress.
But one thing that he was trying to compare was this
spending to relief fund, and, as you know, Judge Moore, we had
terrible tornadoes. Three different tornadoes on the same night
went to my whole congressional district from one end to the
other.
But we get calls daily from county judge executives and
mayors in those counties asking if they can use some of this
money we are talking about today--the state local money for
tornado relief and we are trying to get the answer from the
Treasury Department, and all they respond to us is with a
link--the frequently asked questions, and that is not one of
the questions, can you use this money for tornado relief.
So can you talk about if you have had any challenges in
Boone County or you heard from any county judges, not just in
Kentucky but in other parts of America that have had trouble
getting answers from Treasury about how to properly spend this
money?
Judge Moore. Early in the process, yes. The rollout from
Treasury took longer than we had hoped. At NACO what we did we,
basically, created a list of frequently asked questions.
We assembled those because a lot of them were the same
across the country. We would submit those questions to
Treasury, and by the end, once they got things stood up, we
were getting answers back usually in 24 to 36 hours of yes or
no or here is how you might.
We posted those on our websites for our county members. So
there are still frustrations at times in some of those areas
that are gray. We have been told that the Federal match for
FEMA, that local ARPA funds can be used for a local match, and
that is one thing that we have gotten answers for.
The flexibility with the $10 million for lost revenue, we
feel like that that is going to be helpful to those counties
that need this flexibility.
What we did with the funds, of course, was broadband is our
main expenditure and we have found that there were areas of our
county that would not have had broadband if not for these
funds. It is something we knew was important, but there just
wasn't funding within our budget to do it. This provided gap
funding to be able to make that happen.
Mr. Comer. And it is a good thing that money went directly
to you and you didn't have to funnel it through Kentucky Wired
so--or you never would have gotten a penny of that. But, again,
thank you, Judge Moore.
Madam Chair, I yield back.
Chairwoman Maloney. The gentleman yields back.
The gentleman from Maryland, Mr. Raskin, is now recognized.
Mr. Raskin. Madam Chair, thank you very much. I remember
when the committee was considering creating the state and local
fiscal recovery funds back in February 2021 and there was a
deluge of bipartisan demand from all over the country for this
help.
We heard from Democratic Governors. We heard from
Republican Governors like the Governor of my state, Governor
Hogan. We heard from Republican mayors.
We heard from Democratic mayors, corporations, labor
unions, you name it, and they all described the immense
challenges they were facing due to the economic and public
health consequences of COVID-19, ranging from plummeting tax
revenues across the board to government furloughs and layoffs
at the state, county, and local level.
Judge Moore, you are the president of the National
Association of Counties, or you were at the time, and you
helped lead the charge for this legislation. Why was there such
unified support for the recovery funds coming from Republican
and Democratic leaders alike, and was there anything partisan
about this legislation in terms of how the money was
distributed?
Mr. Moore. I would say that there were differences between
our members, not just Republican and Democrat but others on
whether spending should occur. Once we discovered that when the
state and local aid, especially the local aid, was removed from
the bill, through several of the negotiations, the total
amount, the $1.9 trillion, did not change.
It was then that many conservatives, not all but many
conservatives chose to support the state and local aid
component of the bill. We didn't have a vote in Congress, but
if the money was going to be allocated we felt that direct aid
to every county of every size was the way to go. So we locked
arms and advocated for that, that if the funding was--if the
bill passed, that local aid was a component of it.
Counties chose to distribute that based on population
across the country. We thought that was the most fair and
equitable way to do it. Every county, every size received
direct funding, and they were able to make the decisions at the
local level. We believe in local control. We support local
control.
Mr. Raskin. Well, and that provision, in fact, gave
unprecedented decision-making authority to states and
localities in the distribution and direction of funding where
the communities needed it most. For example, in my district, in
Montgomery County, the funds helped to provide financial
assistance to low-income working families. It supported the
broadband infrastructure program. It expanded the county's
public health services. Frederick County plans to use recovery
funds to expand broadband services, to provide economic aid,
and improve infant and maternal health, just to name a few
examples.
So do you believe that this flexibility in the allocation
of the recovery funds, Judge Moore, contributed to the progress
of our economic recovery?
Mr. Moore. Yes. I would say that it has contributed to the
economic recovery. It has been wonderful gap funding for those
needs in our communities that otherwise would not have been
funded. And my example once again, getting one gig of speed to
every home in our county would not be happening without these
funds. We found, during the pandemic, that connectivity was so
critical.
So I do believe that it is creating jobs, it is creating
economic investment, it is supplying a need that would not have
been addressed without the funds.
Mr. Raskin. Thank you. And Mayor Woodards, can you describe
how flexibility in the eligible uses and distribution of the
recovery money has helped your city?
Ms. Woodards. Certainly. I like the theme of the question
because clearly giving us the opportunity to decide what is
best, we are the ones who are on the ground every single day.
We knew our residents in the grocery stores and in the gas
stations, so we clearly understand the need. So the ability to
have flexible spending and to be able to pivot quickly on the
ground has been incredibly important to us.
I think about the fact that one of the things that we faced
was we had to shut down an engine, a fire engine in our city.
We were able to use ARPA dollars to recover that engine. That
was so imperative for us because in the midst of everything
that was happening with COVID we have had a string of arsons in
our community. So being able to have that engine available and
being able to pivot to see the importance of that was good for
us, and saved lives.
Mr. Raskin. Forgive me for interrupting. I just want to say
there are a lot of us who are former state officials and local
officials who serve on this committee and in Congress. We are
great champions of strategic and cooperative federalism, and I
think that these provisions have exemplified what it means to
actually get power, get control, and get money to the county
and local governments closest to the needs of the people.
I yield back to you, Madam Chair.
Chairwoman Maloney. The gentleman yields back. The
gentleman from Georgia, Mr. Johnson, is now recognized.
Mr. Johnson. Thank you, Madam Chair.
Georgia's Fourth congressional District, which I am proud
to represent, received about $62.5 million from President
Biden's American Rescue Plan, which was passed by congressional
Democrats without a single Republican vote. Americans received
stimulus checks, extended unemployment benefits, and $300 per
month advance tax cut income from the earned income tax credit
cut.
In additional to rental and mortgage assistance and
moratoriums on evictions and home foreclosures, plus support
for the businesses forced to close due to the pandemic,
Democrats also provided financial support to state and local
governments and money to support school systems.
Because of the Joe Biden American Rescue Plan, we put shots
in arms, money in pockets and pocketbooks, we put kids back in
school safely, and we put Americans back to work in good-paying
jobs. Democrats ensured that local school systems could keep
the doors open to Head Start programs, that county medical
centers had the wherewithal to make it through the pandemic,
and that small business owners could have a fair chance to
survive and prosper. The ARP has saved so many from the
catastrophic repercussions of the COVID-19 pandemic, and
Democrats gave our economy a boost that surpassed pre-ARP
forecasts by both the Federal Reserve and the Congressional
Budget Office.
This landmark legislation proves that Congress and the
President are working together for the American people, and not
a single Republican in either the House or the Senate voted to
pass the American Rescue Plan. But when they go back home they
always take credit for legislation that they vote against, and
American voters are not fooled.
My friends on the other side of the aisle are left to argue
during this hearing that the American Rescue Plan was too much
money, helped too many people, and caused inflation. I guess
they would have preferred that President Biden leave the Nation
stuck in a recession with families out of work and
impoverished, unable to afford groceries and unable to afford
paying the rent and keeping a roof over their head. They whine
about the $1.9 trillion American Rescue Plan that helped
working people, families, and small businesses, but when they
had control of the House and Senate, under an insurrectionist
in chief, they shoved out the door a $5.8 trillion tax cut, 83
percent of which went to the top one percent. And my friend,
Mr. Joffe, was cheerleading on the sidelines with two pompoms.
The American Rescue Plan was help for those who needed that
help, and I am proud to have voted for this transformative
legislation, which is part of President Biden's vision to build
a better America. And don't forget that Congress passed the
American Rescue Plan just two months after the insurrection.
Dr. Leachman, my office assisted small business owners with
over $50 million in Economic Injury Disaster Loan and Paycheck
Protection Program loans as well as with $500,000 in minority
small business disaster loans. There is no doubt that the
American Rescue Plan provided essential aid that allowed
businesses to keep their doors open. Unfortunately, the Federal
Government has a well-documented history of failing to spend
advertising dollars in black and minority-owned media outlets,
including when advertising to black and minority communities.
The ARP provided a wide variety of investments targeted to
minority communities, from SBA programs to funds to provide
vaccines.
Are you aware of any effort to ensure that ARP advertising
dollars were invested in black and minority-owned firms, and
how well do you think those loan opportunities were advertised
in minority communities?
Mr. Leachman. Thank you for the question, sir. This is not
an issue that I have studied closely. I will say that the
Treasury guidance that requires states and the larger cities
and counties to report on the impacts of each project spending
on equity and to describe their community engagement processes
will help in this regard in helping to assure that recipients,
when they receive the funds, are engaging their communities
properly and thinking about what are the equity impacts. But I
would certainly encourage you to continue to advocate with
state and local officials there to do the outreach and
engagement necessary to go hand-in-hand with the direction of
these funds.
Mr. Johnson. Thank you. I yield back.
Chairwoman Maloney. The gentleman yields back. The
gentleman from California, Vice Chair Gomez, is now recognized.
Mr. Gomez. Thank you, Chairwoman Maloney. First let me
thank all the speakers. One of the things that I like to focus
on is just how cities and states are definitely the backbone of
our democracy and the backbone of how do we get services to the
people in need. A lot of folks on the other side of the aisle
always say that we shouldn't be helping--the Federal Government
should be out of people's lives, but yet they refuse to help
the cities and counties that are there day in and day out.
Most people don't know but I actually worked for the
National League of Cities once upon a time, in 2005-2006, so it
is good to see you, Victoria, and I also just understand the
work that you do to advocate on behalf of the cities.
The funds, as everybody knows, that would have come into
the coffers of cities and local municipalities and states
because of just shutting down to make sure that people were
protected from the pandemic really took a toll on cities and
counties, and that is something that we saw across the board.
In the city of LA, they had almost a $700 million budget
shortfall if it wasn't for what we did here at the Federal
level, and the money that they did get allowed them to make
sure that their employees had their paychecks, that they didn't
have to go without, which are crucial when it comes to any
economic downturns, because oftentimes local governments are
the ones that can stay afloat longer than, say, a small
business or a medium-sized business.
So those dollars are crucial to be circulating within the
economy. They are the ones that are keeping that small business
afloat because they can still continue to purchase those goods
and services. So what we were doing was not just to help cities
but it was also to help the local economy to help everybody,
and that is why it was so crucial. And these cities, what did
they do? They stepped up on their own to do COVID testing
sites, vaccination sites, made sure that people were getting
their food distributed, taking care of seniors, making sure
that the first responders did not go without a paycheck and
could respond to an emergency.
So it was so crucial, and I want to say if it wasn't for
that California would be devastated. California received about
$27 billion, invested in affordable housing and homelessness
resources; $1.75 billion to fund the construction of new
affordable homes; $1.2 billion for Project Room Key, to acquire
hotels and motels to providing housing for individuals and
families who were experiencing homelessness; $300 million for
affordable housing preservation; and $40 million for eviction
and foreclosure prevention and defense. That is just to name a
few.
The County of LA received $1.95 billion. That is huge. What
did they do? Build more affordable housing. They were working
to keep people off the streets so that we wouldn't be dealing
with a bigger health care crisis. And the city of LA received
$1.27 billion, and a lot of that is still going out as we
speak. But it has made a big difference.
Dr. Leachman--is he still here? I can't see him.
Mr. Leachman. Yes, sir. I am here.
Mr. Gomez. OK. Can you describe how severe the need of
housing assistance has been throughout the pandemic?
Mr. Leachman. Yes, absolutely crucial. You know, a new
census survey that started up right around the time of the
pandemic kicked in has been valuable in helping us understand
what the impact of the pandemic has been on people's ability to
pay for their rent. As of October, still one in six renters
were not caught up on their rent, and as in other areas, the
disparities here are quite stark by racial and ethnic
categories. For example, among black renters, the share was
more than one in four. And still, you know, even before the
pandemic, 23 million people who lived in low-income households
were paying more than half their income for rent and utilities.
So the need is quite stark, and as California has shown in
its allocations and many other states and localities, using
fiscal recovery funds to help address this crisis, to keep
people housed, at this very difficult time has been a very
important and vital use of these funds.
Mr. Gomez. And that was something that I wanted to really
highlight. These are not folks that are not working. These are
often the working poor. They are working two, three, four jobs
a week to make ends meet, and they still have barely enough
money to survive. But when the pandemic hit they were really in
a bad place and they were really struggling. So this has helped
millions of people stay off the street and make sure that our
communities are kept as full as possible and that we have
limited the emotional and economic devastation for people of
color and the working class throughout this country.
With that I am glad I am supporting. We are still helping
these cities and counties, and I yield back.
Chairwoman Maloney. The gentleman yields back. The
gentlelady from Missouri, Ms. Bush, is now recognized.
Ms. Bush [continuing]. St. Louis, and I thank you, Madam
Chair, for convening this important hearing today.
The state and local funding in the American Rescue Plan
included critical targeted investments that have empowered our
local leaders with the resources they need to save lives. The
American Rescue Plan helped deliver over $700 million to our
St. Louis region, an unprecedented and much needed infusion of
direct assistance during this pandemic and economic crisis.
These funds are proving crucial in helping to alleviate
existing injustices such as gun violence, economic inequality,
and access to health care that the pandemic exacerbated.
Moreover, I see the success of these investments as a blueprint
for how this committee can work with local governments and
advocates to broaden our public investments in the many crises
of our day.
Judge Moore, you frequently referred to the recovery fund
support for counties as critical. How does providing these
critical resources to counties empower them to respond to
emergencies?
Mr. Moore. Thank you. In many of America's counties these
dollars are being utilized to fund communication systems, 911
systems, and other tools to be able to respond to emergencies.
We have already talked about public health and how additional
facilities are being added and programs to deal with the health
emergency component of it.
Overall, I would say that once again many of these funding
needs were on the radar for capital plans or other funding
requests, but probably would not have been met as quickly, or
in many times not at all without the assistance and the
flexibility that counties received across the country.
But I do believe it was critical. It was a critical time,
and it did create jobs and provide resources for local
governments.
Ms. Bush. Yes, it did. Thank you.
One of the many things I am most proud of in the way our
recovery fund was disbursed is that the city of St. Louis,
under the leadership of our mayor, Tishaura Jones, engaged in
an extensive community consultation process that considered
over 2,500 public comments, another crucial step of the process
that takes time. I am incredibly proud of the way St. Louis is
pursuing evidence-based, community-informed expenditures,
including $500 checks--checks--in direct cash, that are going
to our community members that need it the most, aid to help
boost the vaccination rates, funding to prevent evictions, and
investments that have helped to promote safer communities.
Now I believe we must build on the success of this
committee's contributions for addressing this pandemic and make
similar investments in ongoing emergencies, including the
climate crisis. The Federal Government should also support
states, tribes, territories, and local governments in
delivering climate and environmental justice investments, just
as we did in responding to this pandemic. My Green New Deal for
Cities bill, H.R. 2644, would apply Green New Deal framework to
do just that.
Mayor Woodards, do cities around the country need
additional Federal resources to appropriately combat the
climate crisis?
Ms. Woodards. Simple answer, yes, we do. So these towns and
villages have been leading on climate action, as you know, for
years, and because local leaders are the first responders, and
we are seeing the impacts of climate change every day in our
communities.
We have also been calling for a Federal partner in these
efforts to enact national policy that will support local
efforts and to provide resources and assistance to communities,
including financial assistance, and we are so pleased that the
Bipartisan Infrastructure Bill makes considerable investments
in building communities' resilience, reducing greenhouse gas
emissions, and investing in renewable energy.
Ms. Bush. Thank you. Ms. Sharp, should this committee make
the climate justice investments in every Native American nation
in this country, as we do in our bill and as we did for COVID-
19 funding?
Ms. Sharp. Yes, absolutely. Not only are tribal nations
disproportionately impacted by the pandemic, we are also
disproportionately impacted by the climate crisis. My nation,
the Quinault Nation, is currently under five states of
emergency--one for the pandemic, one for sea level rise, one
for a landslide that potentially will take out Highway 101, the
only access road to our community.
So yes, when we convene our board of directors and we hear
reports all across Indian country, we are facing the climate
crisis, we are on the front lines, and we are so very grateful
not only for this investment but the future investments that
are on the horizon. We absolutely need it.
Ms. Bush. Thank you. I look forward to working with each of
you to fight environmental racism using the most successful
framework we used to combat the pandemic, close partnerships,
and resource support for states, tribes, territories, and local
governments.
Thank you, and I yield back.
Chairwoman Maloney. The gentlelady yields back. Before we
close, since she was our last colleague asking questions today,
I want to offer the ranking member an opportunity to offer any
closing remarks you may have. Ranking Member Comer, you are now
recognized.
Mr. Comer. Thank you, Madam Chair. I feel like
Representative Hank Johnson just delivered my closing remarks,
because he reminded every American that every Democrat voted in
favor of this bill and every Republican opposed this bill. And
the reason that the Republicans opposed this bill is because we
warned of inflation. And here we have it: inflation.
You learned this in Economics 101 in college. I went to
Western Kentucky University. When the government prints money
it devalues the dollar. The government has printed a lot of
money in the name of COVID. Thank goodness for Joe Manchin and
Kyrsten Sinema in blocking that Build Back Better bill in the
Senate, because I can only imagine what the inflation rate
would be when that money hit the economy. And Representative
Bush said this is a model of how this committee can help with
local governments? I mean, what this committee did was just
approve a blank check for the local governments.
Now I can tell you in Kentucky there will be counties, like
Boone County, a progressive county, affluent county, a fast-
growing county, that will spend the money wisely. There are
counties in Kentucky that I can say, without hesitation, will
not spend the money wisely. That is a fact.
Now, the government and this Congress and what Republicans
wanted to do--what the government should do, what Republicans
wanted to do--put guardrails. That is what this committee
should do, Representative Bush. If we are going to oversee
Federal money being reappropriated back to the local level we
need to make sure there are guardrails and that this money is
transparent, and that this money is actually needed. And there
are needs, but again, the government is going to have to stop
spending money, stop printing money, because our children and
grandchildren are going to have to pay for this, and it is
going to lead to more inflation.
So you are going to continue to hear Republicans talk about
the ways that we need to control inflation, to stop inflation.
This is one of many crises that I mentioned in my opening
statement, in addition to a lack of border security, in
addition to a disastrous energy policy that probably led to
what is going on in Russia and Ukraine right now. So we are
going to continue to talk about the issues that the American
people want on this side of the aisle. The No. 1 issue that
most Americans are concerned about is the issue that they face
every day, when they go to the grocery store, when they go to
the gas pump, when they pay rent, when they pay for their
prescription drugs, inflation. And you can't continue to print
and spend money without suffering the consequences of
inflation.
Madam Chair, I yield back.
Chairwoman Maloney. The gentleman yields back. I recognize
myself for closing statement.
As we have seen here today, President Biden's American
Rescue Plan and the state and local fiscal recovery funds have
worked. They have put our communities and our country on a path
for a strong recovery from the recession of 2020. Independent
economists have told us that if Congress had not passed the
American Rescue Plan the country would likely have plunged into
a double-dip recession, with lower incomes and millions more
Americans left without jobs.
Instead, the country is benefiting from strong GDP growth,
low unemployment, and a faster recovery than any other develop
countries. And while Republicans tried today to blame the
American Rescue Plan for the inflation we face today,
independent economists say this is simply not true.
As we track the progress of the recovery funds it is
important that we have data to ensure our recovery is
equitable. That is why I co-sponsored the Targeting Resources
to Communities in Need Act, a bipartisan bill that would direct
Federal investments to areas of persistent poverty.
I am thankful to our witnesses today for sharing their
knowledge and stories from their state, tribal, and local
governments. Your testimony has demonstrated the transformative
impact the recovery funds have had on our communities, and we
thank you.
I ask unanimous consent to enter into the record a number
of documents and reports, including a letter from the National
Conference of State Legislatures, reports from the National
League of Cities and Administration.
Without objection, so ordered.
Chairwoman Maloney. The country is grateful that President
Biden announced the American Rescue Plan on his very first day
in office that Congress took quick action to pass President
Biden's plan, and that a year later we are in a better position
than we could have hoped for. I am proud of this committee's
role in designing and passing these recovery funds that are
leading to an equitable recovery and helping Americans most
affected by the public health crisis.
In closing, I want to thank our panelists again for their
remarks, and I want to commend my colleagues for participating
in this important conversation.
With that, and without objection, all members will have
five legislative days within which to submit extraneous
materials and to submit additional written questions for the
witnesses to the chair, which will be forwarded to the
witnesses for their response. I ask for our witnesses to
respond quickly as you can to any requests, and this hearing is
now adjourned.
[Whereupon, at 1:36 p.m., the committee was adjourned.]
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