As large parts of the U.S. economy are put on standby to slow the spread of COVID-19, the federal government has resorted to unprecedented rates of spending to keep the economy on life support and prevent a slide into a full-blown depression.
At this point, the series of relief spending bills authorized by Congress is about equal to the total amount of government spending in response to the Great Recession. However there’s one big difference between the two situations. Where Great Recession spending took place in a gradual series of bills over the course of about six years, COVID-19 relief disbursements to the tune of about $4 trillion will take place over just six months.
That’s a staggering sum of money spread very quickly. Not surprisingly, it has set off warning bells among government accountability advocates. One such group is the Committee for a Responsible Federal Budget (CRFB), which launched a new project called the COVID-19 Money Tracker to offer a “one stop shop” for policymakers, journalists, researchers, and others as the U.S. government addresses the pandemic. The project’s goal, according to the organization, is to “track every major action taken by Congress, the Federal Reserve, the executive branch, and various federal agencies, following how much is disbursed over time, where the funds go, and how much is recovered through loan repayments, dividends, or equity repurchases.”
“In a crisis like this, actions to rescue the economy must not only be timely, targeted, and temporary, but also implemented in a responsible and transparent manner. We hope this project will help to promote these goals,” the CRFB stated in a press release.
In a webinar last week unpacking the next phase of COVID-19 relief in the Paycheck Protection Program and Health Care Enhancement Act — which was recently signed into law by President Trump — CRFB Senior Policy Director Marc Goldwein noted that time was of the essence in passing the first series of relief bills, and that some unnecessary spending is an unavoidable part of that process.
“Nobody would argue it’s perfect, but given the speed with which they put it through it provided a lot of important support,” Goldwein said of federal relief measures so far. He noted that now that many individuals and businesses have a little bit of economic breathing room, policymakers can slow down and focus on oversight so that government spending is as targeted, fair, and effective as possible.
“We understand why they have to move fast. We understand why this legislation cannot get the normal hearing that it would for regular legislation. It can’t go through the committee process,” he explained. “That doesn’t mean it doesn’t deserve oversight. In fact, oversight and transparency on the back end is even more important because we don’t have time to evaluate it on the front end.”
Federal legislative actions so far are projected to add about $2.5 trillion to the national deficit in the long run (accounting for most business loans being paid back in 2021 and beyond). According to Goldwein the national debt is now projected to hit 100 percent of GDP by the end of the year, up from a pre-pandemic projection of 80 percent.
The latest report from the CRFB’s COVID-19 Money Tracker shows where all this relief spending is going, parsing out spending in each of the pieces of legislation Congress has passed. It breaks down the disbursement of Paycheck Protection Program Loans, for instance, by industry and by state, and it shows revised projections for how this new spike in spending will impact the budget deficit.
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Andrew Collins cut his teeth in politics as a congressional campaign staffer during the 2012 election. Since then he has worked in Washington, D.C. as the digital media manager and as a staff writer at the Franklin Center for Government & Public Integrity, and is a recent graduate of the Trinity Fellows Academy (class of ’17). His work has appeared in Politico, US News & World Report, The Chicago Tribune, The Daily Caller, and The Hill. He lives in Seattle, WA.