Washington, D.C. —Today, Congressman Don Beyer (D-VA), the Vice Chair of the U.S. Congress Joint Economic Committee, released a report arguing that federal aid to state and local governments is crucial for containing the coronavirus and preventing economic disaster and should be a major focus of Congress’s fourth legislative response to the public health crisis.

As the report shows, states are being simultaneously strained by skyrocketing spending to combat the coronavirus and large losses in revenue (i.e. sales tax, income tax, tourism). Furthermore, since almost every state is required by law to balance its budget, this may force many to cut spending in areas like education.

Budget cuts at the state level will in turn force budget cuts at the local level, creating a downward spiral that will slow response and recovery nationwide.

“State and local governments are crying out for assistance, and our health and economy depend on Congress helping them,” Beyer said. “If Congress does not respond with aggressive aid, we risk repeating the mistakes of the Great Recession, which lasted years longer for state and local governments because the federal government left them to fend for themselves.”

Beyer continued, “No one should think that this is someone else’s problem. While the fire is hottest in New York right now, it soon will burn from state to state, especially if Congress does not do enough to help state and local governments. As a result, every town in America will be crushed by the coronavirus and our economy will fall a lot further than it has already fallen.”

As the report shows, Medicaid will account for much of states’ increased spending since individuals who lose their jobs (and employer-sponsored health insurance) will need to enroll and many current enrollees will contract the coronavirus and need to be cared for. While the second coronavirus response package includes a 6.2 percentage point increase in the federal government’s share of Medicaid funding (known as the Federal Medical Assistance Percentage or FMAP), the increase was about 3.8 percentage points less than the average increase in the American Recovery and Reinvestment Act. On average, states cover about 40 percent of the cost of Medicaid with the federal government paying the rest.

“One of the most important things Congress’s fourth legislative response must do is increase the federal government’s share of Medicaid funding—the current increase is less than what was given to states during the Great Recession and should be much higher, especially when you consider that the joint federal-state health insurance program is states’ second biggest cost and 10 million people have filed for unemployment over the last two weeks,” Beyer said. “The last thing we want states to do is reduce Medicaid eligibility in the middle of a public health crisis.”

Beyer continued, “Congress’s fourth legislative response must increase aid to state and local governments and allow the Federal Reserve to purchase long-term state and local debt.”

WASHINGTON, DC—Congressman Don Beyer (D-VA), Vice Chair of the Joint Economic Committee, today released a new report examining recent economic progress and remaining challenges facing the Black community in America.

“The data captured in this report show significant changes affecting African Americans which include both progress and areas where significant disparities remain,” said Beyer. “In the latter category, the unemployment rate for Blacks is almost twice what it is for Whites, which is unacceptable. Closing persistent, and in some cases, growing gaps between the economic experiences of White Americans and Black Americans is vital to helping our society overcome its history of racial discrimination.”

The report shows that Black Americans have made substantial progress, for example:

  • Black college graduation rates more than doubled from 1990 to 2018.
  • By 2017, the share of Black women enrolled in college exceeded the share of White men enrolled.
  • Incarceration rates for Black Americans fell by nearly one-third between 2007 and 2017.
  • The gap in life expectancy between non-Hispanic Blacks and Whites decreased between 2006-2010, though progress since has stalled.

Yet glaring inequities persist:

  • The Black unemployment rate remains twice as high as the White unemployment rate (6.0 percent vs 3.1 percent in January 2020).
  • The median net worth for White families is nearly 10 times greater than for Black families.
  • Black households earned just 59 cents for every dollar White households earned in 2018.
  • Fewer than half of Black families own their home compared to nearly three-fourths of White families.

Congressman Beyer is currently serving his third term in the U.S. House of Representatives, representing Northern Virginia suburbs of the nation’s capital. In addition to his role as Vice Chair of the JEC, Beyer serves on the House Committee on Ways and Means and the House Committee on Science, Space and Technology. 

In December 2017, just days before President Donald Trump signed the $1.9 trillion tax legislation that would create sweeping changes to the U.S. federal tax system, he told television viewers that “it’s going to be one of the great Christmas gifts to middle-income people.”

For several months, the president had been selling the legislation on the claim that the tax cuts would “be rocket fuel for our economy.” His claim was critical to defending against the criticism that most of the tax cuts would go to corporations and the very wealthy—supposedly, the money would ‘trickle down’ to the middle class. Unfortunately, nearly two years of evidence show that his administration's estimates were wildly wrong.

The March on Washington, where Dr. Martin Luther King delivered his “I Have a Dream” speech, was formally named the March on Washington for Jobs and Freedom. Dr. King later organized the Poor People’s Campaign as a multi-racial movement for economic justice, which advocated for living wages, income support for the unemployed, improved funding for education, the right to unionize for agricultural workers and access to land and capital. Dr. King’s legacy includes his efforts to secure both civil rights and economic justice. 

More than a half-century after Dr. King’s death, important progress has been made, but for Black Americans much of the economic inequality that he fought against remains.