CARES Act gives needed assistance, adds to federal debt

We are now getting some additional information as to the federal spending known as the CARES Act, “the Coronavirus Aid, Relief, and Economic Security Act”, an 880-page Bill. Although some of the spending makes sense, there are also expenditures that dictate policies inconsistent with our own state policies. The allocation of funds is defined within the Act. The original purpose of the Act was to ensure economic stability and to provide a boost to the economy due to the fact that the world economy has been interrupted at the direction of the governing authorities.  

Some of the funds fit with the original goal, but much of it appears to have been thrown in to appease special interest groups. Many of the categories of spending do not rise to the level of an actual and immediate “need”.  There are several categories which could be more carefully scrutinized. One that stands out in the funds allocated to South Dakota includes over $800,000 for the National Endowment for the Arts and Humanities. I understand that the Arts are an important part of life, but that amount for South Dakota is not an immediate need as compared to the losses we have suffered over the past few years due to flooding, farming losses, infrastructure needs, as well as health costs and business challenges due to the virus.  

You can go online to see the wording of the Act or contact me and I can send you the spreadsheet for the specific categories of expenditure for each state. Every state will receive at least $1.25 billion. South Dakota is in the lowest category, so we actually come out with more money per capita than larger states such as California and New York.

The headings on the spreadsheet for these funds shows each state and include payments for: Education, Child Care and Development Block Grant, Community Services Block Grant, Home Energy Assistance, Family Violence Prevention, Child Welfare Services, Head Start, Congregate and Home-Delivered Meals, Family Caregivers, Protection of Vulnerable Older Americans, Centers for Independent Living, Poison Control Centers, CDC Grant, Community Health Centers, Unemployment, Justice Assistance Grants, Emergency Food Assistance Programs and Administration, Manufacturing Extension, Emergency Performance Management Grant, Emergency Shelter and Homeless Assistance, Public Housing, Rental Assistance, Housing Opportunities for Persons with AIDS, Transportation, Election Security, and National Endowment for the Arts and the Humanities.

This major bi-partisan spending Bill is troubling in light of the following:

• The Act begins with approximately $2.2 trillion, AND 

• The fact that all of that is new federal debt, AND

• The fact that for every $1T of debt is $3,000 of NEW debt for every citizen in the United States, AND 

• The fact that each person bears the weight of the current federal debt, which presently totals around $70,000 for every man, woman, and child.

So, if you consider the original purpose for this major federal expenditure AND what it is supposed to accomplish, you might find that it could have been better spent if it was allocated to each state based upon population and allowed as a simple Block Grant, which would allow each state to decide how it could be best spent. The extent of this current problem will be better known in the coming weeks and it is likely there will be need for a Special Session to address our specific revenue and spending problems.  

I do hope you will let me and the other legislators know your thoughts and concerns about the ongoing COVID-19 issues.  

Please visit the Legislative Research Council’s website to listen to the recorded committees and floor debate from the last Session.  That’s found at: https://sdlegislature.gov/

As always, please feel free to contact me at steven.haugaard@sdlegislature.gov