Economic Recovery Proposal, State and Local Relief Key Component

  • Authors Jason Furman, Timothy Geithner, Glenn Hubbard, and Melissa Kearney published policy recommendations in the Aspen Institute’s report, Promoting Economic Recovery After COVID-19.

  • Their key recommendations were related to: 1) income support for the unemployed, 2) incentives to reward and facilitate work, 3) offer additional lending support for small and mid-size businesses and 4) provide direct federal support to state and local governments.

  • Ideas for specific federal support for state and local governments centered on: 1) block grants for states and localities that could not be used for tax cuts or pension increases, 2) expand federal matching for Medicaid, 3) financial support for K-12 education and 4) aid for public universities, four-year colleges and community colleges.

  • The total cost for federal support for state and local governments ranges from $735 billion to $1.3 trillion depending upon the recovery scenario.

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