Connecting state and local government leaders
A $748 billion proposal would fund initiatives like unemployment insurance and the Paycheck Protection Program, while a separate $160 billion bill would provide state and local aid, but also a liability shield.
A bipartisan group of lawmakers on Monday introduced two bills that offer elements of emergency coronavirus relief—combining the most widely supported proposals into one bill that senators expressed hope could be enacted before the year’s end and putting controversial elements, including state and local aid, in another.
The broader $748 billion package would extend unemployment insurance benefits for 16 weeks, reup the Paycheck Protection Program for businesses and also includes funding for education, vaccine distribution, and transportation.
“There is not a reason why our leadership should not take this up and pass it,” said Sen. Joe Manchin, the West Virginia Democrat who led negotiations.
The second, more controversial, bill would provide $160 billion for state, local and tribal governments, but also enact liability shields for businesses, schools, hospitals and others. That proposal will test lawmakers’ bipartisan negotiating ability. Democrats favor providing state and local aid, but are against the liability protections, while Republicans have said those shields against lawsuits are necessary but do not believe more state and local aid should be doled out.
Splitting the two bills could make it easier for the centrist group to convince congressional leaders to take up the $748 billion deal. The move also essentially embraces a suggestion made by Senate Majority Leader Mitch McConnell last week that Congress pass provisions that lawmakers can agree on and, perhaps, leave the biggest points of debate for after president-elect Joe Biden is sworn in.
Either bill could be voted on alone or attached to a government funding deal that must be voted on by the end of the week in order to avoid a government shutdown.
Congress will have to act quickly. Unemployment insurance and other federal programs approved through an earlier congressional relief package will run out at the end of this year without action from Congress. Even if lawmakers do approve the package, experts have cautioned that people relying on benefits will end up going without them for some period, as states that have struggled throughout the pandemic with outdated unemployment systems will need to implement another round of changes.
The bipartisan effort to negotiate a deal that could be passed before lawmakers head home for the Christmas holiday emerged after congressional leaders’ efforts stalled before the presidential election. Republican Sen. Susan Collins called the breakthrough "a Christmas miracle” and said she hoped House and Senate leadership and the White House, would "take our products and use them as the basis for a Covid relief package that is urgently needed."
The $748 billion proposal would extend all federal unemployment programs for 16 weeks and provide $300-a-week supplemental benefits. It would also provide $300 billion for the PPP, with payments reserved for businesses that had seen revenues decline by at least 30%, according to Collins.
The bill also funnels $13 million to the federal food stamps program and food banks, $82 billion to schools, $45 billion for transportation including airlines, buses, Amtrak and public transit, $25 billion for rental assistance, and $35 billion for healthcare providers. The bill would also extend a federal eviction moratorium through January 31, and student loan forbearance through April.
In the measure that would provide funding to state and local governments, lawmakers laid out specific distribution formulas based on population for how the money would be doled out. Each state would get a minimum of $500 million, with additional funding based on revenue losses and population size. Governors would be required to distribute 40% of the money their states receive to localities and counties. That distribution could be divided based on proportional population, revenue loss or both factors. States would not be allowed to use any of the money to fund pensions.
“We were trying to find something that would recognize the difference between states that would be fair to all,” said Sen. Bill Cassidy, a Louisiana Republican.
State and local governments have pleaded with Congress for more money throughout the pandemic, complaining that revenue losses combined with coronavirus-related expenses have dug into their budgets. But if Democrats want state and local aid approved, under this bill they will have to sign off on liability protection as well—a top priority for McConnell and other Republicans.
Ahead of Monday’s rollout of the legislation, McConnell called on lawmakers to approve a targeted Covid relief package.
“The next several days are going to bring about one of two outcomes,” McConnell said during a speech on the Senate floor. “Either 100 Senators will be here shaking our heads, slinging blame, and offering excuses about why we still have not been able to make a law… or we will break for the holidays having sent another huge dose of relief out the door for the people who need it.”
However, it is unclear whether McConnell will support the split legislation put forth by the centrist group of lawmakers.
House Speaker Nancy Pelosi would not say Monday whether she was open to dropping state and local aid from the broader package, adding that negotiations were continuing.
Andrea Noble is a staff correspondent with Route Fifty.
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