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Thank you all for joining us. This is an important week. As you know, Friday marks the one-year anniversary of President Biden signing the American Rescue Plan into law.

This bill has loosened the pandemic’s grip on our country in countless ways over the past year. Today, I wanted to take a moment and look back at one of the bill’s more significant programs – the State and Local Fiscal Recovery Fund – and talk about what it’s done. 

As this group knows better than anyone, the first year of the pandemic decimated government budgets, forcing states and communities to layoff or furlough a collective 1.3 million workers.

These were the employees we rightly called “essential” – teachers, first responders, public health officials.

How is a city supposed to weather a pandemic if it can’t keep on its first responders? How are you supposed to bring kids back to school if you are facing the prospect of laying off teachers?  Those are the questions we haven’t had to answer this past year – or at least have had to answer much less frequently – because of the ARP.

The bill kept our society’s everyday institutions working. Hawaii, for instance, had planned to furlough 10,000 employees, but on the day President Biden signed the Rescue Plan into law they cancelled the layoffs.

Nor did the program only rehire public workers. Over the past year, more than 740,000 essential workers – teachers, nurses, police officers and grocery clerks – have received bonus pay on top of their regular wages. They deserve to be compensated for keeping society running during the pandemic, and they are. 

In some ways, the ARP also acted like a vaccine for the American economy, protecting our recovery from the possibility of new variants, like Omicron and Delta.  The pandemic produced a highly unusual economic crisis – one tied not to the movements of markets but to the spread and evolution of microbes. It hit different places in different ways at different times. The state and local fund was designed with that in mind, too.

Rather than one burst of money that could only be spent in certain ways, it called for sustained and flexible funding. We wanted local officials to be able to channel resources to wherever the problems were as they arose. With Omicron and Delta, that meant public health. Local governments funded nearly 2,000 distinct projects with state and local money to fight COVID-19. They’ve bought PPE, conducted immunization campaigns, expanded testing, protected nursing homes, and many other efforts.

But it’s been broader, like on housing. Last summer, many of the mayors here saw that two trends were colliding: the spread of new variants and the expiration of the nation’s eviction moratorium. There was a risk that people were going to lose the roofs over their heads, something that would not only complicate our efforts to stop the spread but also complicate people’s lives for years to come.  

That’s why many communities used state & local funding to supplement emergency rental assistance.  Today, eviction filings have remained well below their pre-pandemic levels in large part because of those decisions. In fact, according to a new analysis by Princeton University’s Eviction Lab published today, millions of renters avoided the threat of eviction last year due to the federal government’s serious and unprecedented interventions, in significant part through the American Rescue Plan.

Still, there’s a good argument that without the American Rescue Plan in general – and the State & Local Recovery Fund in particular – our economy would’ve been much weaker for much longer. And it might’ve stayed that way for some time to come. 

That was the lesson of 2008. During the Great Recession, when cities and states were facing similar revenue shortfalls, the federal government didn’t provide enough aid to close the gap. It was a profound error. Cities had to slash spending, and that undermined the broader recovery. One study concludes that for every $1 local governments cut in spending during a recession, there is a corresponding drop in GDP of more than $1 – and possibly as much as $3. After 2008, state government employment didn’t recover from the Great Recession until 2019.

Today, I can state unequivocally: That history will not repeat itself.

We are no longer in the grips of this pandemic. We have helped millions of families and businesses escape from COVID with their finances intact. That was never a sure thing. It’s due, in large part, to the bill we celebrate this week. 

Thank you for having me.  

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