Government, business leaders and individuals are consistently looking for reasons not to extend or enhance protective measures rather than reasons to leave them in place. While there are clear and sharp political and social divides over specific practices, these trends are neither isolated nor unclear. Political and social differences are variations on the same theme, rather than truly divergent approaches. Overall, the economic impact of the pandemic and associated mitigation efforts was generally less severe in 2020 than first feared but heavy nevertheless. GDP was down 3.5 percent for 2020. The unemployment rate for 2020 averaged 8.1 percent. The consumer price index (CPI-U) for 2020 increased 1.4 percent. The clear policy decision to emphasize economic recovery as much as possible, even in the face of greater case loads and death tolls, resulted in less severe economic impacts in the third and fourth quarters. There are also signs of greater resilience in business and consumer attitudes and behavior than originally expected, suggesting faster recovery once the pandemic is finally tamed, which we now assume to occur by the end of June. Substantial, but by no means full, recovery across most sectors is expected for this year. By the end of 2022, most sectors are expected to have reached full recovery. However, certain sectors are still not forecast to reach full recovery until 2023. With the pandemic and the economy moving from the acute crisis phase to the transitional phase, this will be our last update. We have taken the opportunity for this final update to use year-end data and more in-depth analysis to generate estimates of the actual loss of government revenue to Indian tribes. Federal support has helped mitigate that decline to a degree, with $8.0 billion set aside in the original CARES act for tribal governments. However, the CARES act included significant restrictions on the uses of that funding that have reduced its benefits to Indian country. Based upon our analysis, we estimate that the negative budgetary impact on tribal governments in 2020, after accounting for federal relief/stimulus efforts to date, equaled between $9.0 billion and $12.0 billion. For 2021, we forecast an additional negative budgetary impact on tribal governments of $1.9 to $3.0 billion, for a cumulative shortfall of between $10.9 billion and $15.0 billion. This information is presented in the table below:
Estimated Loss of Tribal Government Funding (net of CARES act and other stimulus payments to date)
2020 (estimated)
-$9.0-$12.0 billion
2021 (forecast)
-$1.9-$3.0 billion
Cumulative Loss (net of stimulus to date):
-$10.9-$15.0 billion
Source: KlasRobinson Q.E.D.
∴ EXECUTIVE SUMMARY
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