Money Is Not Enough: The Temporary Impact of Pandemic-Era Aid on American Fiscal Federalism

Abstract As part of its response to the COVID-19 pandemic, the US federal government sent an unprecedented amount of flexible aid to local governments. While some observers saw this aid as representing a fundamental shift in fiscal federalism towards a “politics of repair,” its temporary nature raises questions about its long-lasting impact. Drawing on Peter Hall’s policy paradigm framework, this article argues that while pandemic-era programs adjusted federal policy instruments in significant ways, they do not represent a paradigm shift in intergovernmental fiscal relations between federal and local, general-purpose governments. As pandemic aid is spent down tightening fiscal constraints for some local governments underscore the limits of this temporary intervention. Ultimately, pandemic aid was a brief interlude of expanded federal support—an exception rather than a new norm.