Emergency coronavirus deal leaves out state, local aid

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Senate Majority Leader Mitch McConnell, R-Ky., walks from the Senate floor to his office at the U.S. Capitol. McConnell said Wednesday that all parties have agreed to not leave Washington until they pass an emergency coronavirus relief bill.

Congressional leaders have tentatively reached an agreement on a $900 billion emergency coronavirus aid package that includes a new round of checks to individuals but no direct aid to state and local governments.

The U.S. Conference of Mayors, National League of Cities, and the National Association of Counties said in a letter to Congress Wednesday saying their “top policy priority remains local budget relief for cities and counties to partially offset revenue losses and unbudgeted emergency expenditures.”

However, the three groups requested at least the inclusion of three technical changes to maximize the benefits they are receiving. One was to ask that the federal government pick up 100% of the cost of all COVID-19 related Emergency and Major Disaster money they receive from FEMA.

The other two involve the CARES Act passed by Congress in March. One change would enhance the flexibility for Coronavirus Relief Fund “by making ‘replacement of lost revenue’ an eligible expenditure. And the other would extend the spending deadline 12 months past the current Dec. 31.

The deal is expected to closely resemble the $908 billion package proposed by a bipartisan group of Senate and House lawmakers with one major exception. It substitutes the $160 billion in direct aid to state and local governments that had been proposed with direct checks to individuals. And it drops a controversial effort to provide temporary liability protections for businesses and universities.

The direct checks have been a priority for President Trump as well as some lawmakers ranging from Sen. Bernie Sanders of Vermont on the political left to Sen. Josh Hawley of Missouri on the right.

Sen. John Thune, R-S.D., said the direct checks under consideration could be between $600 and $700 per person and double that amount for families with children.

Thune, the second-ranking Republican in the Senate leadership, also confirmed to reporters that the direct payments would be in addition to the continuation of a supplemental federal unemployment benefit of $300 a week. An earlier proposal by the administration would have replaced the unemployment benefitis with the direct checks.

“We are close to an agreement,” Senate Democratic Minority Leader Chuck Schumer confirmed Thursday during his daily morning floor speech. “It’s not a done deal yet, but we are very close.”

The emerging deal, according to Schumer, came as a result of “two very long and very productive meetings. Our final discussion stretched late into the evening.”

Treasury Secretary Steve Mnuchin represented the administration in the overnight Wednesday negotiations with the two Democratic leaders -- Schumer and Speaker Nancy Pelosi -- and the two Republican leaders -- Senate Majority Leader Mitch McConnell and House Republican Minority Leader Kevin McCarthy.

McConnell said during his morning Senate floor speech that the group “made major headway toward hammering out a targeted pandemic relief package that would be able to pass both chambers with bipartisan majorities.”

The Senate majority leader said all the parties have agreed to not leave Washington until they do.

“Further targeted relief is now much overdue,” McConnell said. “We need vaccine distribution money. We need to re-up the paycheck protection program to save jobs. We need to continue to provide for laid-off Americans. Congressional leaders on both sides are going to keep working until we get this done.”

Schumer said Democrats would have preferred more than what’s in the emerging deal, “but this won’t be the last time Congress speaks on COVID relief. Right now, we must address this emergency over the short term.”

The delay in direct federal aid to states and localities to help close their revenue shortfalls will be somewhat offset by the targeted aid in the $900 billion aid package.

Details of the emerging agreement haven’t been released but it’s expected to closely resemble the proposal agreed to by the House and Senate bipartisan group led by Sen. Joe Manchin, D-W.Va.

On Monday they announced they had split off the $160 billion in state and local aid, creating a $748 billion package that includes $82 billion for schools and $45 billion for transportation.

The $82 billion for education includes $54 billion for an elementary and secondary school emergency relief fund; $7.5 billion to be distributed through the CARES Act Governors Emergency Education Relief Fund that includes a $2.5 billion set aside for private elementary and secondary schools; and $20 billion for a Higher Education Emergency Relief Fund.

The $45 billion in emergency aid for transportation includes $15 billion for transit agencies, $4 billion for airports with a special set aside for concessionaires, $1 billion for Amtrak, and $8 billion to support the motorcoach and bus industry.

The Small Business Administration would get $300 billion to allow the hardest-hit small businesses to receive a second forgivable Paycheck Protection Program (PPP) loan.

Earlier this month, National Governors Association Chairman Andrew Cuomo of New York and NGA Vice Chairman Asa Hutchinson of Arkansas said in a joint statement the bipartisan $908 billion proposal “would bring meaningful relief to those who are struggling; situate states and territories to quickly, effectively and equitably implement their vaccination plans; and prime the economy to allow for a faster rebound.”

But an NGA spokesman said his organization had no immediate comment on the revised package.

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Coronavirus State and local finance Washington DC
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