ast Friday, the House Committee on Oversight and Reform (COAR) approved a bill as part of Congressional Democrats' budget reconciliation efforts that would provide $350BN of direct aid to state and local governments, aid which "in most cases" is "sufficient…to cover pandemic-induced revenue losses and some if not all of the increased costs these governments face," according to the liberal Center for Budget and Policy Priorities (CBPP).

As BofA's Ian Rogow notes, the CBPP recently reduced their shortfall estimates for state and local governments net of federal aid and state rainy day funds to $225bn through fiscal 2022. That's because at the beginning of the pandemic crisis, the CBPP estimated cumulative shortfalls from fiscal 2020 to fiscal 2022 for the states only of $765bn. As the data we reported over these months showed declines significantly smaller than what the CBPP projected, CBPP and others have reduced their shortfall estimates materially.

Now, the House COAR eschewed the bicameral, bipartisan funding proposal from December that Bank of America used to estimate how the $350bn in aid could be allocated. To that end, the 50 states and District of Columbia will receive – if approved by the full House and Senate – $195.3bn and local governments $130.2bn. The territories will receive $4.5bn and federally-recognized tribal governments $20bn.