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For many Americans, the federal government’s plans to stimulate the economy during the COVID-19 pandemic stand out for the direct relief they have offered to individual households, like stimulus checks and expanded unemployment benefits. But these bills also brought unprecedented levels of federal investment in state and local governments.
One of the main features of the $ 1.9 trillion US bailout, adopted in March of this year, was a $ 350 billion fund for states, territories, cities, counties and tribal governments across the country. to supplement their own income. The package also included large funding pots for areas like health, education, infrastructure and others that are funded by state and local dollars. The US bailout followed the $ 2.2 trillion CARES law of March 2020 and other pandemic relief programs that offered aid for similar purposes.
Assistance to state and local governments in COVID-19 stimulus bills was intended to avoid cuts in public services at a time when many observers feared tax revenues could plummet due to economic fallout of the pandemic. But while COVID-19 has created additional urgency for federal support to states, the federal government has long played an important role in supporting state budgets.