Government Executive: Implementing the 2020 Stimulus: Lessons From the 2009 Recovery Act

“Congress has just passed the largest economic rescue package in history. Now comes the hard part: a multitude of federal agencies, private businesses, nonprofits, and state and local governments must help implement a complex piece of emergency legislation in record time. It’s a huge challenge, but we’ve been here before. What lessons can be drawn from the last substantial stimulus package—the 2009 American Recovery and Reinvestment Act—that can help speed the effective implementation of the Coronavirus Aid, Relief, and Economic Security Act?”

“The parallels between the two pieces of legislation are not perfect. The CARES Act is in some ways akin to a combination of the two big stimulus programs of the Great Recession: the Recovery Act and the Troubled Asset Relief Program, known as TARP, that focused on loans and bailouts to banks and large companies. And the Recovery Act, in contrast with the CARES Act, sought to combine immediate fiscal stimulus with initiatives designed to build a lasting legacy of infrastructure improvements and green energy initiatives. But there are enough parallels as to make insights drawn from the Recovery Act experience a worthwhile venture.”

“One lesson involves the use of established programs and implementation networks to provide rapid assistance rather than standing up new organizations or procedures. In policy implementation, simplicity and familiarity are often critical to fast action. Some of the most successful elements of the Recovery Act expanded upon existing programs and funding streams to the states. This included an $87 billion increase in federal Medicaid matching funds, a $36 billion increase in federal aid to highways and transit, and over $75 billion for education, most of which could be plugged directly into existing state aid formulas for local schools.”

“These initiatives succeeded in getting federal money out the door rapidly and spent relatively quickly and effectively by the states. Thus, we should expect that elements of the CARES Act that mirror this approach of utilizing existing program structures and networks—such as expanded funding of Unemployment Insurance, additional education spending, additional funding for the Centers for Disease Control and Prevention, increases in federal payments to health care providers through Medicare and Medicaid, and one-time payments to taxpayers based on their previous income tax reporting—have high potential to be implemented relatively smoothly and quickly.”

“On the other hand, the Recovery Act experience suggests that the $366 billion expansion of the Small Business Administration small business loan program may prove more challenging to implement quickly and accurately…” Read the full article here.

Source: Implementing the 2020 Stimulus: Lessons From the 2009 Recovery Act – By By Tim Conlan and Priscilla Regan, April 2, 2020. Government Executive.

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