Congress inching towards relief bill that will include some state and local aid

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A recent turnaround in support for unemployment benefits from Republican Senate leadership means a coronavirus relief bill is more likely to be signed into law, meaning aid for state and local governments in one way or another.

Senate Majority Leader Mitch McConnell, R-Ky. suggested on Tuesday during a Senate Republican leadership news conference that he would support a renewal of expanded unemployment benefits if President Donald Trump does. The issue had been a sticking point in negotiations with the Democrat-controlled House, and sources say McConnell's support of unemployment benefits makes a stimulus relief bill more likely to pass and creates a good chance for some form of aid to go to state and local governments.

“Wherever this thing settles between the President of the United States and his team who has to sign it into law, and the Democrat, not insignificant minority in the Senate and majority in the House, is something I’m prepared to support,” McConnell said Tuesday. “Even if I have some problems with certain parts of it.”

Chuck Samuels, general counsel to the National Association of Health and Educational Facilities Finance Authorities, said McConnell’s changed stance increases the chances of a COVID-19 relief bill passing.

“That’s (unemployment) the first issue that’s got them stuck, but it’s not the last issue,” Samuels said. “They’ve got many fundamental issues to deal with, but there really is no reason why they can’t. Every major issue and provision is compromisable.”

Chuck Samuels, general counsel to the National Association of Health and Educational Facilities Finance Authorities, said it was likely for the next relief bill to have funding for state and local governments.

Samuels believes that the final relief bill will have direct funds for state and local governments, though he couldn't predict how much.

Senate Republicans introduced a $1 trillion emergency relief package in late July, a proposal that is being used as a negotiating tool with congressional Democrats who are supporting the much larger House-passed $3.5 trillion HEROES Act that includes $915 billion in direct aid for state and local governments.

The Republican proposal doesn’t include any new funding for states or municipal governments, but does give more flexibility to state, local and tribal governments for using the $150 billion previously allocated under the CARES Act which passed in late March.

“I would think there would be some state and local government direct funding because the reality is that it’s not a blue state, red state thing and there are many states that are Republican in either presidential elections or Republican governors who are seeking and need aid,” Samuels said. “So I think that will be something where they will find something in the middle.”

Unemployment benefits are a headline issue, which becomes significant to the final outcome of the bill, said Michael Decker, senior vice president of policy and research at Bond Dealers of America.

“The closer they can get to big issues like unemployment insurance or stimulus checks, the closer we are to seeing a final fully negotiated product brought to a final vote,” Decker said. “To the extent that negotiators are signaling progress in those areas, it’s a good sign that the process is moving forward and suggests a greater likelihood that we’ll see a final product.”

Without a bill, there is nothing for state and local governments, Decker said.

“Our best shot is that if they come to an agreement on the top line issues and then hopefully our champions in Congress will work hard that when they come around to working on the details, that state and local governments are included as well,” Decker said.

Emily Brock, director of the Government Finance Officers Association’s federal liaison center, is confident that the House will attempt to compromise with the Senate. According to multiple news reports, House Speaker Nancy Pelosi hopes to have a compromise stimulus bill this week for a vote next week.

“There is very strong widespread agreement that flexibility of already distributed funds, is something that they (Senate Republicans) are very interested in doing and that there is wide agreement in that,” Brock said. The kicker may be that the House will not think just the flexibility of funds is enough, she said.

Matthew Chase, executive director at the National Association of Counties, said NACo hopes and expects there to be new money in the next relief bill.

“We also want to make sure they don’t tie our hands with unnecessary rules that make the programs designed to fail,” Chase said.

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Coronavirus Washington DC Donald Trump Mitch McConnell Nancy Pelosi State and local finance