Summary
- The recent passage of US President Joe Biden’s $1.9 trillion COVID-19 relief package, “The American Rescue Plan Act of 2021,” not only includes checks for individuals, but also allocates funds for state and local governments.
- The new relief package allots $195.3 billion for states, territories and tribal governments, and $130.2 billion for cities and counties.
- How this stimulus will impact the municipal bond market is an important question.
- We caution that this sort of blank spending check comes with a potential moral hazard, so good governance at the state and local level will be paramount in terms of allocating these funds judiciously, in our view.
Seeking Alpha
Apr. 10, 2021