Republicans in New Hampshire and elsewhere have said that trillions of dollars in spending by the Biden administration and Democrats in Congress is the cause of high inflation.
But in New Hampshire, where the GOP controls the Legislature, the governorship and the Executive Council, Republican leaders have both touted and criticized this money, while many Democrats say it was necessary to prevent economic calamity.
More than $6 billion in new federal support has flowed to New Hampshire during the pandemic, a review of publicly available documents shows.
These dollars have boosted small businesses, the unemployed, nonprofits, hospitals, long-term care facilities, municipal governments and schools.
While political parties differ on the value and inflationary effect of some of this spending, they agree that this level of fiscal stimulus was unprecedented.
The state disbursed nearly $1 billion to 14,950 recipients through the $2 trillion CARES Act, signed into law by then-President Donald Trump in 2020, according to the N.H. Governor’s Office for Emergency Relief and Recovery.
That office, with the help of public and private experts, directed relief funding where it was needed amid health and economic challenges, its executive director, Taylor Caswell, said in a statement.
“I have no doubt that our efforts, especially the swift action early in the pandemic investing GOFERR funds to ensure our businesses were able to stay open and the strategic investments we continue to make, play a significant role in our state overcoming these COVID-19 challenges,” he said.
The federal Payroll Protection Program, which also began in 2020, provided $3.7 billion to state businesses in forgivable loans to keep people employed during the pandemic.
Last year, President Joe Biden signed the $1.9 trillion American Rescue Plan Act (ARPA) to combat financial reversals caused by the COVID-19 pandemic and to support public health. The federal government has also sent hundreds of millions of dollars in additional relief money to the state to help people pay for housing and to fund infrastructure improvements, including broadband expansion.
Republican N.H. Gov. Chris Sununu opposed ARPA before it was enacted.
He was among a group of governors who objected to the bill’s allocation of aid based on a state’s unemployed population rather than its actual population. They contended that this penalized states that entered the pandemic with healthy state budgets and strong economies.
“The passage of this bill would send the unmistakable message that Washington politicians expect New Hampshire taxpayers to subsidize poorly run, cash-strapped states,” Sununu said at the time. “While California, New York, and New Jersey make out like bandits with billions of dollars in increased funding, New Hampshire’s taxpayers are left to foot the bill.”
But since Biden signed the bill last year, New Hampshire has received about $1 billion in ARPA money and spent two-thirds on water and sewer improvements, economic development and government administrative services.
In a news release on June 17, Sununu touted the use of $10 million in ARPA funds to make school security improvements.
“Ensuring kids are safe in school has been a priority of this administration for years, and this latest $10 million investment into school safety reaffirms our commitment to keeping students safe in the classroom,” he said in the release.
On June 15, he put out a statement applauding the Executive Council’s decision to accept and expend $50 million in ARPA funds to make improvements at nursing homes.
“This fund will help ensure our County Nursing Homes have the infrastructure and capabilities to keep residents safe,” he said. “By responsibly using these one-time funds for one-time investments, we are able to provide benefits to the citizens of New Hampshire for decades to come.”
Meanwhile, he and other Republican leaders have expressed concern about high inflation and laid the blame at the feet of Democratic spending.
The U.S Department of Labor’s Consumer Price Index, which tracks prices on goods and services, showed an 8.6 percent increase in May compared to a year earlier.
Economists often describe inflation as being caused by too many dollars chasing too few goods and services. So, the injection of money into the economy from the federal government could contribute to inflation.
But other factors include high demand for products after the pandemic eased, supply-chain issues, workforce shortages and oil disruptions caused by the war in Ukraine.
N.H. Rep. Tim Lang, R-Sanbornton, a member of the House Ways and Means Committee, said government money that flowed into the economy during the pandemic, while warranted in some cases, contributed to inflation.
“I do think that you’ll see the inflationary rate is due to the amount of money being spent,” Lang said in an interview.
He acknowledged that government assistance was needed to help keep some businesses afloat early in the pandemic.
“But future generations are going to be tied with this debt that we created to deal with the pandemic,” Lang said. “Things got a little out of hand with spending.”
Executive Councilor CindeWarmington, a Concord Democrat, said the spending was high because the public health crisis was severe.
“Without these dollars, people would have been out of their homes, or wouldn’t have been able to feed their families,” Warmington said in an interview.
Some of the CARES Act money went to boosting unemployment compensation. Also, $1,200 relief checks were issued per adult.
“Also, the Payroll Protection Program really saved our economy,” Warmington said.
“I think there is a lot of politics about this discussion of inflation. The fact is that if the federal delegation hadn’t done what was necessary to provide the funds to shore up our economy and individuals and families across the state, we’d be in a world of hurt right now. There really wasn’t an option.”
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