President Joe Biden’s American Rescue Plan still has hundreds of billions of dollars to inject into the American economy, threatening to make the ongoing inflation crisis even worse.
Economists and experts generally agree that Biden’s stimulus program contributed to inflation, although there isn’t consensus about how much it is to blame. While the $1.9 trillion amount has been set in stone since the package was passed, much of that money hasn’t yet been injected into the economy, and will be in the coming months and years.
#BREAKING Fed again raises US interest rate 75 basis points to fight inflation pic.twitter.com/FV6RGevVTU
— AFP News Agency (@AFP) July 27, 2022
A whopping $122 billion of the American Rescue Plan was allocated to schools for projects like installing new ventilation systems and conducting COVID-19 testing. Now, more than one year after the plan was passed, just 7% of that $122 billion has been spent. The rest of it will be spent eventually, meaning that money from Biden’s inflationary spending package will continue to trickle into the economy.
As of May, Biden was urging local and state authorities to redirect unspent COVID-19 funding toward bolstering law enforcement efforts to reduce gun violence. There are numerous examples of unspent funds states are sitting on. Maine still has almost $200 million in funds to spend, and Chicago’s public school district had only spent about one-third of its $536 million in federal relief as of this spring.
States have until 2024 to allocate their funds from the American Rescue Plan, and until 2027 to actually spend it. (RELATED: The Fed Announces Another Rate Hike To Rein In Inflation, But Economists Aren’t Convinced)
Inflation has reached record highs during Biden’s term in the White House, contributing to a bleak economic picture also affected by high energy costs and slowing growth. The economy is on the verge of entering a recession and could do so officially after Thursday’s GDP report.