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DOC~UMENT RESUME
04304 - (B333U562]
Antirecescjion Assistance: An Evaluation. PAD-78-20; B-146285.
November 29, 1917. 21 pp. + 2 appendices (107 pp.).
Report to thu Congress; by Elmer B. Staats.- Comptroller General.,
7ssue Area: Regional and National Economic Problems (3500).
Contact: Program Analysis Div.
Badget Function: Revenue Sharing and Seneral Purpose Fiscal
Assistance: Other General Purpose Fiscal Assistance (852);
Commerce and Transportation: Ground Transport ation (404).
Organization Concerned: Office of danagement and Budget;
Congressional Budget Office; Cefincil of Ecunom.c Advisers.
Congressional Relevance: House Committee on Banking, Finance and
Urban Affairs; Senate Ccmmittee on Banking, Fousiag and
Urban Affairs; Congress.
Authority: Public Works Employment Act of 1976 (P.L. 94-369.
Tax Reduction and Simplification Act of 1977.
Title II of the Public Works Employment Act of 1976,
known as the antirecession assistance or countercyclical
program, represents one compoient of the Federal Government's
response to severe downturns in economic activity. The aim of
the program is to offset destabilizing actions of State and
local governments during recessions and, in particular, to
maintain basic services customarily provided with emphasis on
the wages and salariev; of public employees. Since local
governments generally experience less budgetary disruption
during a r cession than State governments because their revenue
sources and expenditures are less sensitive to economic
conditions than State revenues and expenditures, the present
allocation of two-thirds of the funds to Iccal governments and
one-third the State governments may not be app'opriate for
effective targeting of antirecession aid. Findings/Conclusions:
The present antirecession assistance program is not a
particularly effective tool for stimulation of the economy
during a downturn, and there is ser±ous disagreement over the
sensitivity to cyclical changes of the program's trigger.
Although recession does not necessarily lead to State and local
destabilizing actions, the combination of recession and
inflation may provoke a response fro- those governments that
runs counter to Federal fiscal policy. The antirecession
assistance allocation does roughly correspond to the incidence
of secular decline in a jurisdicticn, but if it is the intent of
the Congress to provide assistance to mect such problems, ;.
formula more specific-ally tailored to secular decline could be
devised. (Author/SC)](ViewImageLocal?handle=hein.gao/gaobaawik0001&div=1&collection=&method=preview&ext=.png&size=3)