New bipartisan legislation would provide $500 billion in aid to state and local governments, territories and tribes to deal with the COVID-19 pandemic, with the smallest communities in line for a direct slice of the money, unlike some earlier iterations.
The legislation has drawn bipartisan backing in both chambers and support from several local government organizations, such as the National Association of Counties and U.S. Conference of Mayors.
The lead Senate authors on the draft bill, which was being formally introduced Monday, are Bill Cassidy, R-La., and Robert Menendez, D-N.J. Reps. Mikie Sherrill, D-N.J., and Peter T. King, R-N.Y., are the lead cosponsors in the House.
The lawmakers secured additional bipartisan support before unveiling the new version, including from Republicans facing tough reelection battles this fall.
Sen. Susan Collins, R-Maine, is considered one of the most vulnerable GOP senators; Inside Elections with Nathan L. Gonzales rates her race a “toss-up.” In a statement after the new state and local aid proposal was unveiled Monday, Collins said Maine would be in line for at least $2 billion.
Rep. Brian Fitzpatrick, R-Pa., another cosponsor, is considered one of the more at-risk House Republicans this November, with Inside Elections putting him in the “tilt Republican” column.
But there is little indication that either the White House or Senate GOP leaders are ready to entertain another pandemic bill, as they say they are assessing what works or does not work in existing aid. They have been particularly doubtful about more state and local funds on top of the $150 billion distributed under the big $2 trillion March relief package.
Several Republicans have thrown their support behind legislation to allow states and localities to use those funds for a variety of purposes beyond those directly tied to COVID-19. But few Republicans on Capitol Hill have been vocal about getting new federal aid into the pipeline.
Cassidy and Menendez first unveiled their proposal in late April. They made a key change in the bill introduced Monday, eliminating the floor in their original plan that would have limited aid to cities and counties with 50,000 or more residents. That was already a big dip from the first aid round in March, which had a 500,000 population floor.
In a statement, the senators’ offices said they dropped even the much smaller threshold after “talking to numerous stakeholders,” including Collins, Joe Manchin III, D-W.Va., Cindy Hyde-Smith, R-Miss., and Cory Booker, D-N.J.
An aide to Cassidy noted other key changes from their earlier proposal. Those include a prohibition on federal aid being used to support public employee pension funds, and the money could be used to meet states’ obligation to pay a portion of the Federal Emergency Management Agency’s tab in federally declared disaster areas.
Cosponsors of the House bill include Josh Gottheimer, D-N.J., Tom Reed, R-N.Y., Tom O’Halleran, D-Ariz., Fred Upton, R-Mich., Ted Lieu, D-Calif., Fitzpatrick, Debbie Dingell, D-Mich., and Elise Stefanik, R-N.Y.
‘Wrong measuring stick’
Gottheimer said in an interview that two of the four counties in his district were not eligible for much aid provided in the last bill because they were below 500,000 in population.
“It was the wrong measuring stick,” he said. “Those of us who represent smaller municipalities and smaller counties want to make sure that if they got hit hard by the virus that there was support for them.” Gottheimer said the new bill would provide aid to areas that have been hurt by the virus even if their population is small.
Under the new bill, $16 billion would be set aside for Native American tribes. The remaining $484 billion would be allocated to states, territories, the District of Columbia, counties and municipalities.
The bill would allocate the money as follows:
- One-third of the $484 billion would be distributed based on each state or territory’s percentage of the U.S. population. Counties and municipalities would each get one-sixth of the state allocation, in proportion to their share of the state’s population.
- One-third would be distributed according to each share of nationwide COVID-19 infections, with counties and municipalities again getting one-sixth of their state’s money based on population.
- The final third would be parceled out based on each state’s revenue losses as a percentage of combined state losses over the course of this year. Counties and municipalities again would get their one-sixth share, based on their revenue losses in proportion to overall losses in their state.
Each state would receive at least $2 billion from the first two tranches — up from $1.25 billion in the March law — on top of any money they get from revenue losses in the third tranche.
The funds could be used for pandemic-related costs occurring in 2020 through the end of 2022, or to replace lost revenue during that period.
The $3 trillion measure passed by the House last week would provide another $500 billion for states and $375 billion for cities and counties. The aid to counties and cities would be divvied up according to population, with cities with 50,000 or more residents getting 70 percent of the municipal aid and cities with fewer than 50,000 getting 30 percent of the aid. A Democratic aide said every county and city would receive some aid under the proposal.
Territories and tribes also would get $20 billion each in the House bill.
Kevin Hassett, a senior adviser to President Donald Trump, said Monday that additional aid might not be needed if economic growth picks up.
“I’ve been really positively impressed at how quickly things are turning around and if they continue to do that then we probably won’t need anything else,” he said, adding, “But maybe we will.”
Hassett said, “if the programs that are essential to get people to the other side without going bankrupt … ran out of money, then of course we’d rush in right now and begin talking with Congress about doing something like that. But right now there’s plenty of money left in these facilities, so we think that we have a little bit of a luxury to watch and see.”
Nevertheless, Hassett said last week that White House officials were studying whether to recommend additional aid for state and local governments and “haven’t reached a firm conclusion.”