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Dr'UMENT RESUME
02859 - [A2033117]
Antirecession Assistance Is Helping but Distribution Formula
Needs Reassessment. GGD-77-76; B-146285. JuJy 20, 1977. 12 pp. +
4 appendices (15 pp.).
Report to the Congr6ss; by Elmer B. Staats, Comptroller General.
Issue Area: Intergovernmental Relations and Revenue Sharing:
Different Assistance Approaches (404).
Contact: General Governnent Div.
Budget Function: Revenue Sharing and General Purpose Fiscal
Assistance: Other General Purpose Fiscal Assistance (852).
Organization Concerned: Department of the Treasury.
Congressioual Relevance: House Committee on Government
Operations; Senate Com.mittee on Fiaance; Congress.
Authority: Public Works Employment Act of 1976 (P.L. 94-369).
P.L. 95-3C.
The antirecession assistance program is helping many
areas in the United States, but in some Lespects, the objectives
of the Congress are not being met. A review of this prograw was
conducted at 52 governments, including States, counties, -and
citiez, which received $363 million, or about 31%, of all
antirecession funds distributed for the program's first four
quarters. Findings/Conclusions: Entirecession assistance was
found to have varied effects, from preventing tax increases or
employee layoffs, as intended, to enlarging surpluses. Needy
governments, especially cities, are receiving assistance on the
premise that their problems resulted from the recession. Often
the problems sprang primarily from other causes, such as
long-term erosion of tax bases and inflation. Many governments
receiving antirecession payments were not greatly effected by
the recession, and assistance probably was not needed to combat
recession-.elated problems. Several governments took no
immediate action to stimulate the economy. Giving antirecession
assistance to governments which do not have an immediate need
may limit the intended stimulative effect on the economy, which
could result in their spending the funds when a restrictive
federal fiscal policy is desirab.e. Excess employment, as
defined in current leSislation, is not a reliable ivdicator of
recession's effect cn governments. A better formula for
distributing antirecession funds is essential for the program to
be more effective. (Author/SC)](ViewImageLocal?handle=hein.gao/gaobaacml0001&div=1&collection=&method=preview&ext=.png&size=3)