Congress expected to tee up state and local emergency aid soon

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“For too long, much-needed help has been stalled or diluted by a Republican-led Senate and President Trump,” New York Sen. Chuck Schumer said Wednesday. “That will change with a Democratic Senate, Democratic House, and a Democratic president.”

A Senate vote on federal emergency aid to state and local governments could come as early as the end of this month because Democrats appear on the verge of regaining majority control of Congress’s upper chamber.

Democratic Sen. Chuck Schumer of New York is certain to do that quickly if he becomes majority leader of the Senate as expected.

Schumer highlighted on Wednesday that “one of the first things that I want to do when our new senators are seated is, deliver the $2,000 checks to the American families,” that the two Democratic Senate candidates in Georgia campaigned on.

Schumer didn’t mention state and local aid at his news conference but did note that many emergency aid proposals have been bottled up.

“For too long, much-needed help has been stalled or diluted by a Republican-led Senate and President Trump,” he said. “That will change with a Democratic Senate, Democratic House, and a Democratic president.”

Republican Majority Leader Mitch McConnell of Kentucky has refused over the last several months to bring any proposal for direct state and local aid to the floor for a vote.

Democrats gained the upper hand Tuesday after winning one U.S. Senate race in Georgia and being on the verge of winning a second seat from that state in a second race that remained too close to call Wednesday.

The closeness of the second race is expected to produce a recount, delaying the official outcome. Georgia law entitles the loser to request a recount if the margin of victory is less than one-half of a percentage point, which will delay the certification of the result.

But if Democratic challenger Jon Ossoff maintains his lead over Republican Sen. David Perdue, Democrats will have majority control of the U.S. Senate with 50 seats and the tie-breaking vote of Vice President-elect Kamala Harris after she and President-elect Joe Biden are sworn in on Jan 20.

Until the 20th, Vice President Mike Pence will have the tie-breaking vote, keeping Republicans in control of the Senate for another two weeks.

Charles Samuels of Mintz Levin, counsel to the National Association of Health & Educational Facilities Finance Authorities, described Tuesday’s election results as “a remarkable achievement. A game-changer for municipal bond interests such as infrastructure.”

“It really does matter whether the Democrats or Republicans are in control,” said Samuels. “Compromise will still be necessary but it’s a huge difference as to who controls the committees, floor time etc.”

He predicted that a proposal to raise the limit on bank qualified debt to $30 million from the current $10 million “has a very good chance of success.” Restoration of tax-exempt advance refunding “will have to deal with the revenue loss issues but it’ll be much easier to find a solution in a Democratic Senate,” he added.

The immediate political focus is on Tuesday’s election contest between Republican Sen. David Perdue and Democratic challenger Jon Ossoff.

Ossoff held a small lead as of Wednesday morning, though it was too early to call the race. Under Georgia law, a trailing candidate may request a recount when the margin of an election is less than or equal to 0.5 percentage points.

If Ossoff wins, Democrats will have complete control of Congress, strengthening Biden’s ability to move ahead with his policy agenda for at least the first two years of his presidency.

Emily Brock, director of the federal liaison center at the Government Finance Officers Association, predicted that members of the Public Finance Network of which GFOA is a member will lobby for $500 billion in state and local aid rather than the $160 billion a bipartisan group of senators lobbied for last month.

“Governors have not changed their tune,” said Brock. “They are absolutely at $500 billion. I don’t think anywhere in the process, although $160 billion was supported, we all presented our higher estimates.”

National Governors Association spokesman James Nash declined Wednesday to discuss a dollar amount. “We remain focused on securing much-needed stabilization funding for states and territories to help manage the next phase of pandemic response while continuing to deliver services to all Americans,” Nash said in an email. “We’ll leave the political speculating to others.”

Mark Ritacco, director of government affairs for the National Association of Counties, also declined to speculate Wednesday on how much direct emergency aid might be approved. “We’re encouraged by the prospect of both additional aid to state and local governments, and infrastructure,” he said. “The needs of both of those are urgent.”

NACo, Ritacco said, also has been focused on ensuring that any additional federal aid is widely distributed among all of the nation’s counties and not just the largest ones.

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