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NEMWI Releases Issue Brief on Macroeconomic Policy to Fight the "Greater Recession"
Labeling the current economic downtown and its anticipated worsening the "Greater Recession," a NEMWI issue brief released today advocates major macroeconomic action to remedy the recession and to foster more rapid economic recovery. The issue brief, titled "Fighting the 'Greater Recession': All-Time High Unemployment Levels and Sudden Record-Breaking State and Local Revenue Shortfalls", is authored by NEMWI Research Intern Maria BolaƱos (Brown University '21). Along with NEMWI Senior Fellow for Public Finance Thomas Cochran, she applies the label "Greater Recession" to distinguish what the nation is experiencing now from what is commonly called the "Great Recession" of 2008 -2009 which lasted for 18 months and was followed by an anemic recovery of about ten years. Today's issue brief calls for federal funding to replace record-breaking state and local revenue shortfalls to limit headwinds to a robust recovery.
The issue brief contrasts the "Greater Recession" with past recessions, focusing on not only its levels of unemployment but the fact that the "...pandemic has impacted the physical and economic health of low-wage workers before others in the workforce, exacerbating racial income, wealth, and health inequality, whereas past recessions have tended to begin elsewhere in the labor or capital markets and impacted low-wage workers later." The brief shows that the combination of an unemployment-led economic recession with a life-threatening pandemic has created a sudden strain on all elements of the state and local public sectors, including especially the publicly financed health care system, K-12 and post-secondary education, transportation, and emergency services. It recommends that the next round of fiscal stimulus include federal replacement of state and local revenues shortfalls to limit the current recession to a shorter duration and facilitate a more robust recovery than that of the Great Recession. The brief concludes with summaries of two pieces of pending legislation which would each address the state and local fiscal crisis in their own ways: the SMART Act and the HEROES ACT.
While the Northeast-Midwest states have generally managed to reduce their rates of COVID-19 infection, hospitalization, and death, with the pandemic still growing in other regions, Congress is currently considering another round of economic stimulus legislation.
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House Committee Approves WRDA That Includes Brandon Road
The House Committee on Transportation and Infrastructure approved
H.R. 7575
, the Water Resources Development Act (WRDA), on Wednesday, July 15. The bill, which has broad bipartisan support, focuses on large water infrastructure projects, including authorizing the bulk of the U.S. Army Corps of Engineers' (USACE) activities. Congress typically considers a new WRDA every two years.
This year's House WRDA authorizes the construction of 34 pending Corps Chief's Reports; authorizes 35 feasibility studies for water resources development projects; directs the Corps to complete five comprehensive river basin studies for the Great Lakes, the Upper Mississippi River, the Lower Mississippi River, the Lower Missouri River Basin, and the Sacramento River, and directs the Corps to expedite the completion of 41 feasibility studies currently underway. The bill would also allow appropriators to fully fund the Harbor Maintenance Trust Fund (HMTF) through its existing balance, which is approximately an additional $10 billion. A more detailed analysis and breakdown of the bill by NEMWI can be found
here
.
Additionally, WRDA includes an authorization for the construction phase of the Brandon Road lock and dam project in Joliet, Illinois, a project aimed at keeping invasive Asian carp out of the Great Lakes. The House bill includes a cost share adjustment, calling for an 80 percent federal share and 20 percent nonfederal share of cost for the project. The Senate included a similar authorization for the project, but with a 75 percent federal share and 25 percent nonfederal share of cost adjustment. The House Congressional Great Lakes Task Force Co-Chairs released a joint press release in support of the project that can be viewed
here
.
For more information contact Matt McKenna, Great Lakes Washington Program at the Northeast-Midwest Institute, at mmckenna@nemw.org.
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U.S. House To Vote on Its First FY 2021 Appropriations Bills This Week
The U.S. House of Representatives is scheduled to vote on the first series of FY 2021 appropriations bills this week. Being touted as a "mini-bus," the first package of bills will include the FY 2021 State & Foreign Operations, Agricultural & Rural Development, Interior & Environment, and the Military & Veterans Affairs appropriations bills. Key highlights of the bills include:
FY 2021 Interior-Environment
- $335 million for the Great Lakes Restoration Initiative (GLRI);
- $6.36 billion for the Clean Water State Revolving Fund;
- $3.86 billion for the Drinking Water State Revolving Fund;
- $248 million for EPA's Sec. 106 Clean Water State Grants;
- $56.7 million for EPA's Sec. 221 Sewer Overflow and Stormwater Grants;
- $188 million for EPA's Sec. 319 Non-Point Pollution;
- $25 million for U.S. Fish and Wildlife Service Asian carp activities;
- $10.62 million for USGS Asian carp activities; and
- $13 million for the USGS Great Lakes Science Center.
FY 2021 State & Foreign Operations
- $10.8 million for the International Joint Commission (IJC):
- FY 2021 funding remains consistent with the prior year level for the IJC's Great Lakes-St. Lawrence River Adaptive Management Committee for Phase II of their expedited review of IJC's Plan 2014; and
- $36.99 million for the Great Lakes Fishery Commission (GLFC), of which no less than $1 million be used to address grass carp in the Great Lakes.
The House is expected to continue its work on the FY 2021 appropriations bills over the next couple of weeks before it recesses for the summer in August. It remains unclear when the Senate Committee will begin marking up its versions of the FY 2021 bills.
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This Week in Washington
In the House:
In the Senate:
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NEMWI: Strengthening the Region that Sustains the Nation
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