by Guy Page
The Vermont Legislature may need a special summer session to spend all of the money bestowed on the State of Vermont by the $1.9 trillion American Rescue Plan Act, Vermont lawmaker David Yacovone (D-Morristown) said in the March 4 News & Citizen.
“Why would a special session of the Legislature be needed? Well, to be clear it may not be needed, but if these funds come to Vermont in April as speculated, and given the Legislature is set to adjourn in mid-May, things will have to move very quickly,” said the veteran lawmaker who is a key member of the House Appropriations Committee. “To manage a thoughtful plan for investing an additional $900 million in one-time expenditures could be a tall order.”
Vermont’s haul is now closer to $1.3 billion after the version approved by the US Senate over the weekend included an additional $400 million, thanks in part to the work of Sen. Patrick Leahy, who chairs the Senate Appropriations Committee.
Yacovone said, “some may say spending $900 million is easy peasy. After all, just look at our roads. Fix them! Or how about using some of these funds to fix our pension challenges?” However current limitations prevent Montpelier from spending this money on anything but Covid-related expenses – and roads and pensions don’t pass that test, he said.
Housing might, though, given the rise in homelessness due to Covid, Yacovone suggested.
At present, none of our federal or state elected officials seem to be addressing another fiscal question raised by the $1.9 trillion spending package: who will pay for it, and how, and when?
When asked this question by Vermont Daily at last Friday’s press conference, Gov. Phil Scott said: “I don’t know. I’m sure it has to do with our children and our grandchildren.”
The Committee for a Responsible Federal Budget estimates debt from the American Rescue Plan Act alone could be $4.1 trillion if spending and tax credits are eventually extended. America’s national debt is on track to be 130% of our Gross National Product within 10 years, the committee estimates.
On March 4, the Congressional Budget Office estimated that US budget is on an “unsustainable trajectory” in which debt will be double the size of the economy in 30 years.
A CRFB statement warns that “any policies in the American Rescue Plan Act that lawmakers intend to make permanent should be offset, and future extensions should certainly be fully offset with tax increases or spending restraint…..Ultimately, high debt levels will slow income and wage growth, increase interest payments, place upward pressure on interest rates, reduce the fiscal space available to respond to a recession or other emergency, place an undue burden on future generations, and heighten the risk of a fiscal crisis.”