How the $1.9 Trillion American Rescue Plan is Boosting Innovation

5 min readMar 17, 2022


  • The American Rescue Plan Act (ARPA) has allocated billions of dollars to federal, state, and municipal government innovation efforts.
  • How those funds are spent will depend on federal and state directives, goals, and initiatives.
  • Several municipalities and states are already putting the funds to innovative use.

The American Rescue Plan Act (ARPA) is one of the most significant funding efforts in American history. It puts billions of dollars at the disposal of agencies up and down the line for government innovation, and opens the door to new approaches. Here’s what you should about ARPA and what it means for government innovation and innovation strategy.

What is the American Rescue Plan?

The American Rescue Plan Act of 2021, sometimes called the COVID-19 Stimulus Package and often just the American Rescue Plan, is a fiscal stimulus bill passed in March 2021 by the Biden Administration with bipartisan support. It builds on previous appropriations and policies from the CARES Act passed in 2020.

The most notable elements in the plan early on were stimulus payments sent to every taxpayer, paid leave for people to get vaccinations, and supplements to unemployment benefits. Other provisions of the bill have started becoming more visible as well.

Most notably, $350 billion was set aside to provide to states to make up for the predicted fiscal shortfalls from the drop in tax revenue as people began to stay home and changed their daily routine to protect themselves. There were also billions allocated to transportation, agriculture, and cybersecurity as part of the bill.

Despite the data seemingly pointing toward ongoing shortfalls, most states actually saw little impact in their overall revenue collection in the long term. That leaves states in a unique position; they have billions of dollars to spend, with no strings attached to it, and in some cases, little idea of how to use it.

This is where government innovation is stepping to the fore with some fascinating new ideas.

Five Ways the American Rescue Plan is Boosting Innovation

1. Developing an Upward Mobility Plan

The pandemic has revealed a rather stark divide between the haves and the have-nots on a local level. While higher-income families were largely able to keep their jobs and maintain continuity in their lives, lower-income households have seen enormous disruption in the form of lost jobs, lost relatives, and other issues that worryingly reflect the 2007–2009 housing crisis.

The government of Mobile, AL, has been using pandemic funds to bridge these gaps, developing a list of equity projects to assist the lower-income communities of the city. One project, for example, will rehabilitate a vacant building in the city’s downtown into affordable housing with easy access to jobs and other needs.

Other projects will work to reduce gun violence, giving at-risk kids summer camps and other spaces to learn and spend their time in, and funding community-based violence prevention programs.

2. Child Care

As the child care industry struggles both with the loss of income from the pandemic and a loss of workers, states are looking to these funds to create new child care initiatives. One event hosted by the Federal Reserve Bank of San Francisco looked at several approaches in Nevada and California to give parents the tools they need to get back to work. This includes a focus on rural areas, which traditionally have received less funding.

These issues are becoming particularly pressing as the economy picks up and companies struggle to fill jobs. The pandemic put over one-third of mothers temporarily, or possibly permanently, out of the workforce, and child care can help restore them.

3. Data Infrastructure

Cities generate an enormous amount of data and have an urgent need to analyze it to find issues and solve problems. Yet coordinating across sometimes dozens of agencies, each of which may have different data systems and approaches, is a common obstacle.

The city of Syracuse, NY has seen an opportunity and is working on using $2 million in ARPA funding to jump this particular hurdle. The system will increase the system’s data capacity, sync automatically when new data comes in, and help city analysts synthesize the data into actionable approaches.

4. Increasing Access

One of the fundamental challenges of any government program is simply getting the word out. Even the best-run program can struggle to make those who need it aware of it, and get them to understand how and where it’s available.

The city of Seattle was no stranger to these challenges before the pandemic and, with need being great, decided the best way to do it was to cut out the paperwork. The city spent $500,000 in ARPA funds to create the iForm, a one-stop application that connected users with all city assistance programs.

Going forward, this will both reduce paperwork and ensure the people who need help get it faster.

5. Protecting City Culture

Before the pandemic, the city of Long Beach was working to preserve key parts of its history and culture. African American, Latinx, and Cambodian communities had contributed to the city in many ways. And maintaining those contributions became more pressing as these communities were among the first hit by the pandemic.

To that end, the city is deploying funds to create cultural corridors — spaces designed to keep history alive and keep these communities vibrant. It’s the latest idea from a government innovation team that revamped the airport, ensured government materials were available in multiple languages, and worked to improve Long Beach since the team’s inception in 2015.

This is just a sampling of how government innovation is coming to the fore. Across the country, there’s an unprecedented opportunity for governments to improve the lives of their citizens and tackle long-standing issues. As the funds are spent, we’ll likely see even more creative programs that make life better for everyone in a community.

Want to see how you can tap into your community for more effective government innovation? Request a demo!

This article was originally published on the IdeaScale blog here.




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