Senators to roll out revised bipartisan bill for $500B in state, local emergency aid

Two senators will unveil updated legislation this afternoon to provide $500 billion in pandemic relief for states, local governments, U.S. territories and the District of Columbia, and their bill will include added bipartisan support.

Sens. Joe Manchin (D-W.Va.), Cindy Hyde-Smith (R-Miss.), Cory Booker (D-N.J.) and Susan Collins (R-Maine) are signing onto a bill originally introduced last month by Sens. Bob Menendez (D-N.J.) and Bill Cassidy (R-La.).

The amended bill completely eliminates any population threshold to qualify for aid, “allowing every state, county, municipality, U.S. territory and the District of Columbia to qualify for direct federal assistance, regardless of its size,” Menendez and Cassidy said in a release.

The measure — dubbed the State and Municipal Assistance for Recovery and Transition Act or SMART Act — would also reverse Treasury Department guidelines stating that prior pandemic assistance for state and local governments can’t be used to replace revenue shortfalls.

The revised bill tweaks how funding for counties and municipalities is calculated and sets aside $16 billion for tribal governments. The legislation has the backing of the U.S. Conference of Mayors, the National League of Cities and the National Association of Counties, the senators noted.

Key context: States and local governments have been clamoring for federal help as they grapple with gaping budget shortfalls and evaporating revenue during the coronavirus pandemic.

Menendez and Cassidy’s bill would distribute funding based on population size, infection rates and state revenue losses. All states, Puerto Rico and D.C. would receive no less than $2 billion.

The CARES Act, H.R. 748 (116) , passed by Congress in March provided states and local governments with $150 billion and established a population threshold of 500,000 for aid eligibility.

The original bill introduced by Menendez and Cassidy lowered that threshold to 50,000. But after talking with the bill’s new co-sponsors, the threshold was taken out entirely.

What’s next: Congress is totally split on next steps for delivering another round of coronavirus relief, let alone more money for state and local governments.

The House on Friday passed a $3 trillion bill, H.R. 6800 (116), that would deliver $915 billion for states and municipalities. But a number of Republicans are skeptical about sending more money to cash-strapped states and towns, especially those with existing budget problems.