How COVID-19 Relief Continued to Support Higher Education

The U.S. has disbursed trillions to assist Americans in withstanding the negative impacts of COVID-19. Within this relief aid, America has allocated upwards of $1.59 trillion in student debt during this irregular time. Countless graduates crippled by overwhelming student debt coupled with academic institutions struggling post-pandemic have led Congress to increase emergency funding for the education system. The funding targets suffering universities and graduates who will go on to join the 21st-century labor force. This budget package is one of the numerous programs implemented to support higher education, totaling $85 billion as of August 2021.

In early 2020, the Coronavirus Aid, Relief, and Economic Security Act, commonly known as the CARES Act, was passed by Congress to soften the anticipated burden on the economy. Within this $2.2 trillion bill, approximately $14 billion was designated to the Office of Postsecondary Education in the form of the Higher Education Emergency Relief Fund (HEERF). In May, the Education Department designated $36 billion to more than 5,000 colleges and universities with the aim of bolstering schools that serve students and families hit hardest by the pandemic. Under the HEERF, an additional $3.2 billion was delegated to support students and provide resources to help institutions recover from the impacts of the pandemic in July of 2021. Of these funds, $2.97 billion provide aid to Historically Black Colleges and Universities, Tribally Controlled Colleges and Universities, and other minority-serving institutions.

REMI recently held a webinar discussion, “Universities’ Economic and Diversity, Equity, and Inclusion Impacts,” that explores how continued support of academic institutions and their consequent contributions to the broad-based prosperity of their regional economies can be measured through economic modeling. REMI-SEI quantifies how universities are building a more diverse workforce and equitable future. You can learn more about this presentation by clicking here.

Congress has also dispersed loan relief extensions, in addition to cancellations, of student loan debt. In August 2021, the Biden administration bolstered this commitment by extending the student loan payments grace period through January 31, 2022. This extension offers many students a much-needed suspension on paying their federal student loans without penalties or added interest. In August, Congress also canceled an additional $5.8 billion of student loans to graduates whose permanent disability prevents them from earning income.

As a result of this federal funding, students, graduates, and collegiate institutions are getting the government assistance they need. The potential need for continued federal support has been recognized by Congress and is being assessed to help those in need of immediate assistance, furthering allowing the higher education system to prosper during the pandemic.

To learn more about the CARES act, please click here. You can also click here to learn more about the $36 billion that was received from the U.S. Department of Education.

To find out more about the $3.2 billion under the Higher Education Emergency Relief Fund (HEERF), click here.

Additional information regarding the $8.7 billion canceled student loans debt can be accessed by clicking here.

The Transformation of Energy Sourcing

The world has globally recognized the need to support energy and environmental initiatives to ensure a sustainable and prosperous future. A promising method for sustainability has arisen: make vital reductions in carbon dioxide emissions. 

The world has taken the initiative to reduce emissions and make use of alternative energy sources. While this global shift to cleaner energy consumption benefits the environment, many communities that rely on coal as their primary energy source are suffering from the implications of this economic transition.  

The potential for economic growth is a motivating factor for regional governments to find more sustainable and renewable energy sources instead of coal and another nonrenewable. Rising benefits of clean energy usage and the increased costs of coal production, the coal industry is less profitable than it has ever been.  

The Environmental and Energy Study Institute speculates that “the changing economics of energy generation and the industry’s move toward automation have caused shocks to the coal workforce.” The Institute goes on to confirm that “2019 saw the second-highest number of coal-fired power plant closures and coal mining employment in the United States declined by 39 percent between 2009 and 2016”. With the labor force struggling to recover post-pandemic and coal profitability shrinking, regions whose revenues are heavily dependent on coal are suffering. Although the coal industry is losing value, there are still possible solutions that maintain regional growth and foster economic profitability. 

In our recent webinar discussion, “Shifts in the Energy Industry: An Analysis of Energy Impacts on State Economies,” REMI experts consider how a coal-dependent community will be impacted by the shifts to gas and solar energy. This presentation also analyzes the shifts in state taxation, energy prices, and other related economic variables due to renewable energy innovations before forecasting how state economies are impacted as the energy industry continues to transition away from fossil fuels using the REMI economic model. To learn more about this discussion and view the full presentation of this webinar, please click here. 

The learn more about The Environmental and Energy Study Institute, click here.  

Infrastructure Innovation on the Horizon: A Closer Look at the Bipartisan Infrastructure Framework

On June 24, 2021, The Biden administration announced its support for the Bipartisan Infrastructure Framework (BIF). In nearly a century, American infrastructure has not encountered such an extensive bill as the BIF, totaling $579 billion in investments distributed over eight years for a total of $1.2 trillion in funding. The White House articulated that the “$1.2 trillion Bipartisan Infrastructure Framework will make investments in clean transportation infrastructure, clean water infrastructure, universal broadband infrastructure, clean power infrastructure, remediation of legacy pollution, and resilience to the changing climate”. A detailed breakdown of these infrastructure investments is detailed below:

Amount (billions)

Transportation	$312
Roads, bridges, major projects	$109
Safety	$11
Public transit	$49
Passenger and Freight Rail	$66
EV infrastructure	$7.5
Electric buses / transit	$7.5
Reconnecting communities	$1
Airports	$25
Ports & Waterways	$16
Infrastructure Financing	$20
Other Infrastructure	$266
Water infrastructure	$55
Broadband infrastructure	$65
Environmental remediation	$21
Power infrastructure incl. grid authority	$73
Western Water Storage	$5
Resilience	$47

Total Amount Per year is:

$579 Billion

 

The bill will be financed through a combination of closing the tax gap, redirecting unspent emergency relief funds, targeted corporate user fees, and the macroeconomic impact of infrastructure investment. There were a few non-negotiable payment factors that members of the legislative body repeatedly did not agree to, including Senate Minority Leader Mitch McConnell who said, “I think we need to see the bill before we decide whether or not to vote for it”.

Recently, the two parties met again to attempt to conclude the BIF. However, this bill has yet to be agreed upon by both parties. Even though this bill is not passing as effortlessly as some policymakers hoped, senators involved remain confident they’ll get a deal.  The New York Post broadcasted this session and Sen. Rob Portman, R-Ohio, the lead GOP negotiator believes the discussions are “heading in the right direction,”. The White House and Senate Democratic leadership sent Republicans a “global offer” on Sunday night aimed at finishing unresolved items such as highways and bridges, water funding, broadband, Davis-Bacon Act standards, transit, unspent COVID-19 dollars, and an infrastructure bank, says the New York Post. Schumer said on the floor Monday that the Senate may stay in session through the weekend to finish the bill, warning that “further delays may mean that the Senate will remain in session into the previously scheduled August recess.”

As of July, Bipartisan Infrastructure Framework has not been officially accepted by both parties, though members of the Senate aim to finish writing the bill before August.

REMI recently hosted “Assessing the Economic Framework of the Bipartisan Infrastructure Deal,” a webinar presentation that demonstrates how these infrastructure investments will affect the economy long-term and across different geographies and demographic groups. Within this discussion, we explore multiple line items of funding and their potential impacts on regional economies. Included in the presentation is stimulation that describes the potential implications of all funding related to the Bipartisan Infrastructure Framework.

You can learn more about our recent webinar presentation by clicking here.

Please click here to view the official “Bipartisan Infrastructure Framework” report from the White House.

To read more about the cash breakdown for the BIF, please click here.

 

 

The Housing Market Post-COVID

The COVID-19 pandemic drastically changed many elements of the world around us, including the housing market which has experienced major shocks that have impacted the perpetuity of life. Shifts such as technology innovations, access to employment and talent, and the transition to remote work have produced long-term effects on our economy.

Mckinsey and Company published an article discussing the future of work after COVID-19. In January of 2021, they performed an analysis across eight countries that found “20 to 25 percent of the workforces in advanced economies could work from home between three and five days a week”. This percentage is four to five times higher than what it was before the global pandemic. Nearly 40% of workers would consider quitting if their employers made the return to the office full-time says a survey done by the Insider. With this forecast, jobs that cannot offer this telecommuting option are suffering from being understaffed. As remote work becomes preferable, various changes to the geography of both individuals and companies have occurred. These changes have led to fluctuations in housing and job market demands as regional economies are adjusting to the movements of the labor force.

Low-interest rates on mortgages and the increase of working from home contributed to the eruption of the inflating housing market. Housing inventory reached an all-time low of 1.1 month supply in January 2021. Households who desired more spacious homes in suburban areas with city lifestyle perks overwhelmed the housing marketing with home mortgage applications, consequently overcrowding smaller cities as well. For example, Charlotte, North Carolina’s mortgage applications during the first quarter of 2021 increased by 466% year-over-year, according to Better.com. Due to the shortage of houses, the prices increased dramatically. Real estate online resources such as Realtor.com show the national median listing price increased 8.3% between January and April 2021.

Ken Tysiac, an author for the Journal of Accountancy stated, “business leaders will have to overcome the labor shortage by paying higher wages and implementing more automation and self-service options for their customers.” The productivity of companies operating short-staffed may crucially limit the availability of entry-level jobs. “1 in 16 workers will need to find a different occupation by 2030”, says Mckinsey and Company, “workers will need more advanced skills to move to occupations one or even two wage brackets higher.”

REMI recently hosted “Housing and Economic Recovery,” a webinar presentation that featured a study about the implications of the housing market and other economic factors post-COVED on economic recovery. REMI examines the demand of the housing market and its high inflation rate using REMI’s economic models, before interpreting what this means for our economy long-term. You can watch this full discussion here.

To read more about the surveys done by Mckinsey and Company, read here.

You can click here to read Ken Tysiac article about the pandemic recovery.

To find out more about the survey done by the Insider, click here.

The statics gather by Better.com can be viewed here, and the Realtor.com resource can be accessed here.

A New Frontier of Industrial Innovation

Failure to broaden the research, development, design, and manufacturing of emerging technologies will leave the United States at a strategic disadvantage compared to other global powers. The investments specified in the U.S. Innovation and Competition Act have the capacity to create jobs, increase revenue, boost regional economies and distinguish the U.S. as the leader in industrial innovation.

On May 17, 2021, the U.S. Senate passed the United States Innovation and Competition Act (USICA). This bipartisan bill was created to bolster the United States’ competitive edge for developing frontier technologies, which include artificial intelligence, chip manufacturing, space exploration, and state-of-the-art regional innovation hubs.

The USICA outlines approximately $250 billion worth of investments dispersed over the next 5 years. This funding will support several organizations including NASA, the Department of Commerce, the National Science Foundation, and the Department of Energy. The White House publication recounts how The Endless Frontier Act, a component of this bill, aims to “empower us to discover, build, and enhance tomorrow’s most vital technologies — from artificial intelligence, to computer chips, to the lithium batteries used in smart devices and electric vehicles — right here in the United States.” Funding chip manufacturing and R&D investments are two key goals of the Endless Frontier Act. The bill allocates $2 million on chip manufacturing in the hopes of advancing “economic and national security interests,” particularly for the auto industry and defense organizations.

To explore the economic implications of this bill, REMI held “The New Competitive Advantage: Assessing the Impacts of the U.S. Innovation and Competition Act,” a recent webinar presentation that quantifies the economic implications of ground-breaking innovation AI, machine learning, and chip manufacturing using the REMI Tax-PI model. You can view a recording of this recent presentation by clicking here.

You can click here to read the full article from the White House.

A detailed breakdown of all funding allocated in the USICA can be viewed by clicking here.

The full United States Innovation and Competition Act can be viewed here.