Press Release
from Belfer Center for Science and International Affairs, Harvard Kennedy School

Impact of the COVID Relief Bill

As President Biden’s “American Rescue Plan” heads to his desk to become law, we asked several of our economics and pandemic experts for their thoughts on the significance of the bill.

How much impact will the Biden administration’s COVID-19 relief bill have on the U.S. economy and on those suffering most from the pandemic?


Linda Bilmes, Daniel Patrick Moynihan Senior Lecturer in Public Policy

Bilmes Pull Quote

“The Covid-19 rescue package is a potential game-changer for the finances of state and local government. The bill provides $195 billion for states, territories, and tribal governments and $130 billion for cities and counties, with few strings attached. This money is intended to 'mitigate the fiscal effects stemming from the public health emergency' – which means to replenish lost revenue, restore local services, and to hire back some 1.3 million state and local workers laid off in the past year….

For distressed states and communities, the Covid-19 Bill will provide critically needed funding. Unemployment remains well above pre-pandemic levels and many local governments need to plug budget holes in schools, housing, parks, public health, transit, local services, social programs, and deferred maintenance….

Studies show that the economic multiplier for every dollar spent at the state and local level is at least 1.3 times. So this relief package, combined with the billions of dollars it also provides for education, small business, restaurants and other local responsibilities, could make a huge difference in helping the country get back on its feet."(More here.)


Jeffrey Frankel, James W. Harpel Professor of Capital Formation and Growth

Frankel Pull Quote

“Biden’s ‘American Rescue Plan’ will vigorously fight the pandemic and the damage resulting from it. It will accelerate vaccinations, diagnose and trace new infections, and provide PPE and testing supplies. Beyond immediate health needs, the plan renews support for those unable to work due to the pandemic and provides funds for schools, small businesses and public transportation. Moreover, it attacks inequality, including an expansion of the child tax credit enough to cut child poverty in half. The $1.9 trillion total expense is probably more macroeconomic stimulus than the economy needs right now. But the President wants to err on the side of ‘going big,’ to make sure the country doesn’t suffer another unnecessarily slow and painful recovery like the aftermath of the 2007-09 recession.”


Syra Madad, Belfer Center Fellow; Senior Director, System-wide Special Pathogens Program at New York City Health + Hospitals

Madad Pull Quote

“The American Rescue Plan is more than just a boost to an economy hit hard by the ongoing COVID-19 pandemic. It is a comprehensive people-focused relief bill for average Americans providing provisions in health insurance subsidies, stimulus checks, extended unemployment benefits, child tax credits and funding for schools and education programs. As a healthcare worker and working mom of three, reopening of schools safely and providing financial assistance are essential to our road to recovery. As we continue to battle COVID-19, the bill will fund ramp up of vaccination distribution to enable more vaccines in arms, increased testing capacity, contact tracing and personal protective equipment – all essential elements in our fight against the contagion and to help us on our path to recovery.”

Recommended citation

Bilmes, Linda, Jeffrey Frankel and Syra Madad. “Impact of the COVID Relief Bill .” Belfer Center for Science and International Affairs, Harvard Kennedy School, March 10, 2021