Antirecession Assistance: An Evaluation

Title II of the Public Works Employment Act of 1976, known as the antirecession assistance or countercyclical program, represents one component 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 salaries of public employees. Since local governments generally experience less budgetary disruption during a recession 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 local governments and one-third the State governments may not be appropriate for effective targeting of antirecession aid.