Top 5 Wastes of Money in Nancy Pelosi’s “HEROES Act”

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Posted by Tom Hebert on Tuesday, June 2nd, 2020, 2:30 PM PERMALINK

The Democrat-controlled House of Representatives recently passed Speaker Nancy Pelosi’s “Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act,” a $3 trillion wishlist of long-held liberal priorities completely unrelated to fighting the Coronavirus pandemic.

This partisan legislation is being pushed even though Congress has already acted to help American workers, families, and businesses during the pandemic. 

In March, Congress passed the $2 trillion “Coronavirus Aid, Relief, and Economic Security” (CARES) Act, the largest relief package in American history. In April, Congress authorized $310 billion in additional funding for the CARES Act’s Paycheck Protection Program (PPP) in the “Paycheck Protection and Health Care Enhancement Act,” pushing the cumulative Coronavirus relief Congress has already authorized to nearly $2.5 trillion. 

In stark contrast to the bipartisan CARES Act, Pelosi’s partisan HEROES Act is dead on arrival in the Senate and stands absolutely no chance of being signed by President Trump.

Here are five of the biggest wastes of taxpayer money in the Pelosi plan.

Over $1 trillion in federal bailouts to state and local governments

The HEROES Act contains $500 billion in bailouts to states, $375 billion in bailouts to local governments, and $40 billion in bailouts to tribal and territory governments.

On top of the $915 billion in direct relief, the Pelosi bill contains $81 billion in enhanced Medicaid funding and $100 billion for “dedicated expenses” that would have not existed prior to the pandemic, adding up to $1.08 trillion in bailout cash.

Pelosi is pushing this funding through despite the fact that states have already received funding to offset Coronavirus-related costs, including money for hospitals in both relief packages.

$714 billion of this bailout money is deemed “flexible,” meaning that states can use it to subsidize projects and programs completely unrelated to fighting the Coronavirus.

The $1.08 trillion Pelosi bailout equals the amount of revenue that states collected in FY2019., States and localities are projected to lose a combined $482 billion across FY2020 and FY2021, making this allocation more than double what states are projected to lose in revenue.

The Pelosi plan contains no limitations on how states should spend this money, so irresponsible states will use this windfall to wash away decades of fiscal mismanagement. For example, in 2017, the state pension gap was $1.28 trillion. This means that states would need $1.28 trillion just for their pension systems to be broke.

Federal bailouts in times of crisis has historically led to expansions in state spending, creating a moral hazard and disincentivizing decision-makers from being prudent stewards of taxpayer resources. Following a $20 billion federal bailout for state budgets after a market downturn in 2003, state spending rose by 33 percent in the subsequent five years and state debts increased by 20 percent in the following four years.

Pelosi’s trillion-dollar blank check to fiscally irresponsible states is the wrong approach and would put taxpayers in fiscally responsible states on the hook for bad decisions in other states. 

$25 billion bailout for the postal service

The Pelosi plan includes a $25 billion unconditional bailout for the United States Postal Service for “revenue foregone” during the pandemic. 

The government-run USPS has problems that far predate the Coronavirus. From October to December 2019, the USPS lost $748 million in revenue. The USPS has accumulated more than $70 billion in debt since 2007.

Without demanding structural changes to ensure the long-term solvency of the USPS, this bill is simply throwing good money after bad.

$3.6 billion to federalize election administration

The Pelosi plan contains a host of provisions that would consolidate federal control over election administration, including mandating 15 days of early voting for the 2020 election and beyond, mandating vote-by-mail for 2020 and beyond, permitting blanket same-day registration, and removing safeguards that prevent voter fraud by absentee ballot.

Congress has rightly worked in a bipartisan fashion to strengthen our elections in the past without pushing unrelated mandates, including approving $425 million in funding to shore up our voting systems in December. In the CARES Act, Congress approved $400 million in funding designed to help states deal with the added costs of safely conducting elections this fall. 

States are already taking abundant precautions to make the polls safe for voters, and Republican lawmakers are rightly open to the possibility of further funding for safety-related election measures in a future Coronavirus relief package. In addressing these issues, lawmakers should not follow Pelosi's lead by exploiting the crisis to push left-wing priorities.

$50 million in “environmental justice” grants that stifle economic activity in low-income areas

The HEROES Act contains $50 million in so-called “environmental justice” grants, a slush-fund for state and local governments to subsidize left-wing projects federal taxpayers shouldn’t be responsible for funding.

This program was created to protect low-income communities from unwanted landfills or industrial plants.

In practice, this program has stifled business development and crushed economic opportunity in low-income areas, doing the exact opposite of what left-wing advocates say the program is supposed to do.

Additionally, these grants subsidize projects completely unrelated to “environmental justice,” like litter cleanups, composting classes, and lectures on automobile dependence.

The facts are clear: these grants are left-wing social engineering under the guise of helping disadvantaged communities.

$25 million in arts funding

Democrats famously snuck in $25 million in funding to the Kennedy Center in the previous Coronavirus relief package. What happened? The Kennedy Center put 279 full-time employees and 725 part-time staff members on unpaid furlough.

The Pelosi plan wants to do it again by allocating $10 million for the National Endowment for the Arts, $10 million for the National Endowment for the Humanities, and $5 million for the Institute for Museum and Library Services. Adding insult to injury, this funding comes with no conditions that prevent Kennedy Center-style layoffs and furloughs.

All told, the Pelosi plan is a broadly unserious proposal that subsidizes liberal priorities over helping working Americans through the pandemic.

Photo Credit: Gage Skidmore

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