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Federal coronavirus relief aid to states, cities and towns is best return on investment, CBO says

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By AFSCME Staff ·

With more than 200,000 COVID-19 deaths, the country potentially entering an autumn surge in coronavirus cases and the economic recovery seemingly stalled, the need for federal government relief aid to states, cities and towns has become transparently clear.

According to the Congressional Budget Office (CBO) in a report published this month, federal relief aid to states, cities and towns provides a sound return on investment, more effective than any other policy proposal, since it increases GDP by about 89 cents for every dollar that it adds to the deficit.

In other words, approving aid to states, cities and towns to help offset revenue losses and help maintain essential public services represents the best use of federal taxpayer dollars. This is true when compared to other public policy proposals that aim to offset the devastating economic consequences brought about by the pandemic, including the Paycheck Protection Program, recovery rebates for individuals and the enhanced unemployment compensation.

AFSCME has been calling on the federal government to Fund the Front Lines since the spring. That would include at least $1 trillion in federal aid to states, cities and towns. Back in May, the House of Representatives passed the Heroes Act, which contains a similar amount and would help communities across America continue to provide the essential public services we all rely on, including safe drinking water, garbage collection and safe roads.

Since the spring, conservative and progressive economists have been calling on the federal government to approve further aid to states, cities and towns, arguing that it is the best way to boost the economy. Many of them agree that a package of relief aid to states, cities and towns is a “no-brainer,” as Glenn Hubbard, who served as chair of the Council of Economic Advisors during the George W. Bush administration, put it.

Just as important, 89% of American voters also agree that another aid package is needed.

“There is nothing partisan about wanting your children’s school to be well-staffed, or the garbage to be picked up at your home or business,” AFSCME President Lee Saunders has said. “Democrats, Republicans and independents alike want clean water to come out of the tap. People need the ambulance to show up on time whether they live in red, blue or purple states.”

AFSCME will continue to fight for a federal relief package that meets the demands of the moment.

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