The Support Our Public Services Briefly Had—and Still Need

And how President Biden can make that goal a better campaign theme

By ROBERT KUTTNER

In 2020 and 2021, under Presidents Donald Trump and Joe Biden, Congress passed more than $5 trillion in COVID relief funding in six separate bills. The March 2020 CARES Act alone, at $2.2 trillion totaling about 10% of one year’s GDP, was the largest non-wartime federal stimulus ever.

Without that funding, unemployment in the COVID recession would have easily reached 20%, as the economy spiraled into a 1930s-style self-deepening depression. Entire industries, such as airlines and restaurants, would have collapsed.

The COVID stimulus, which dwarfed the $831 billion stimulus approved under President Obama in 2009 (now widely acknowledged to be inadequate), is a good illustration of government spending sufficient sums to avert an economic disaster. But if you take a good look at where that money went, much of it was money needed for long-deferred, everyday public needs. And 2024 is the year when a lot of that money runs out.

For instance, under the Elementary and Secondary School Emergency Relief (ESSER) Fund, the nation’s schools got $190 billion. As that money is exhausted, public schools face a massive teacher shortage, deferred maintenance expenses, and a fiscal cliff. Philadelphia has a budget gap of $407 million. New York’s is at least $700 million. Across the country, there are potential teacher layoffs and program cuts.

COVID relief also provided funding of $16 billion for public-transit systems and Amtrak. After decades of chronic underfunding and operating deficits, that emergency money was a godsend.

The pandemic sent many transit agencies into a death spiral. Reduced ridership meant reduced income from fares, but increasing fares only reduced ridership further. This downward spiral continues, as the federal funds are depleted.

Deferred maintenance and unreliable service also pushed more riders into Uber. Likewise, more people working at home. In California, the relatively modern and efficient Bay Area Rapid Transit system has only 43% of its pre-pandemic riders. New Jersey’s state system faces a $1 billion budget shortfall by 2026. In Boston, where the antiquated subway and trolley system dates to the 19th century, the budget shortfall for the coming fiscal year, which begins July 1, is projected at between $567 million and $652 million.

COVID relief under the Families First Coronavirus Response Act included a temporary boost to the federal share of Medicaid costs. In exchange, states had to maintain continuous coverage, even if an enrollee’s income status changed. Now, states are disenrolling people who no longer qualify, and national enrollment will decline by 8.6% in 2024.

The good news is that the strong economy lightened the blow that was feared on some of these fronts. For example, the expected “child care cliff” never really materialized, as labor force participation of mothers of young children is larger than ever, and child care sector jobs remain strong. But the damaging rollbacks of the pop-up COVID safety net still have a significant impact in many areas.

THE POINT IS THAT THIS “EMERGENCY” FUNDING pulled back the curtain on public services that are strapped for funds, day in and day out. Biden’s original Build Back Better program, blocked by the Republicans with the assistance of Sens. Joe Manchin (D-WV) and Kyrsten Sinema (I-AZ), would have provided about a trillion dollars more money for public needs, including free and universal pre-kindergarten for all three- and four-year-olds.

The refundable Child Tax Credit, which was really a universal child allowance for all kids under 18, was allowed to lapse after one year. During the year it was in effect, it reduced child poverty by over 40%. Build Back Better proposed to make it permanent.

Next year, Manchin and Sinema will be gone. If the voters return Biden and a Democratic Congress, Biden can take another stab at providing the level of public support that our threadbare public services need.

This goal—of better ongoing support for popular public services—also provides Biden with much better talking points. Republicans oppose good public services. They’d rather have tax cuts for the rich. As part of the 2023 deal to increase the national debt ceiling, Republicans demanded and got a “clawback” of unspent COVID relief funds for the states totaling $27 billion.

Biden has made a mistake in campaigning on how great the economy is. Though it certainly has improved in many respects since 2022, the economy just isn’t all that great for lots of working people.

Build Back Better also proposed expansions in affordable housing and child care, and much more. It would be far better for Biden to campaign on what he could do with a working majority in Congress than brag about how much he has done. Nothing better illustrates the divide between the two parties.

Robert Kuttner is co-editor of The American Prospect (prospect.org) and professor at Brandeis University’s Heller School. Like him on facebook.com/RobertKuttner and/or follow him at twitter.com/rkuttner.

From The Progressive Populist, July 1-15, 2024

Populist.com