As Congress and the White House put the finishing touches on the latest coronavirus legislation to provide additional federal aid for small businesses and hospitals, lawmakers are already talking about the need for more federal help.
New Jersey’s senior senator has already co-written a bill to provide states, counties and other local governments $500 billion in additional stabilization aid to help them weather both the health crisis and the economic depression the pandemic has created.
Sen. Robert Menendez unveiled the measure with Republican Sen. Bill Cassidy, of Louisiana, on Monday during a morning conference call with reporters, where they described the new legislation as a “bigger, bolder and bipartisan” stabilization plan for states and local governments.
“Both of our states have faced great national disasters in the past. But we recognize that this pandemic is unprecedented. It’s like a hurricane sitting on land indefinitely,” Menendez said.
Both lawmakers said the bill has no chance of being incorporated into the new aid package currently being negotiated by congressional leaders and the White House. That bill is expected to provide more than $450 billion to a small-business loan program that has run out of money and add funds for hospitals and COVID-19 testing.
Democrats have pushed for additional funding for cash-strapped states and local governments whose revenues have cratered amid the economic collapse. However, Republicans have opposed adding stabilization funds to the current package.
The last federal stimulus bill, known as the CARES Act, did include $150 billion for states and local governments with populations over 500,000.
Menendez and Cassidy said more help is needed, particularly for states like New Jersey and Louisiana that have been hard hit by both the virus and the economic downturn.
New Jersey has the second most confirmed cases in the nation with more than 88,000 positive test results. More than 4,300 state residents have died from the disease.
Louisiana has over 23,000 cases and close to 1,300 deaths.
Their bill proposes to distribute the $500 billion in federal aid based on population, infections and revenue losses.
One third of the aid would be distributed based on population and would guarantee at least $1.6 billion to each state. Another third would be based on infection rates so that states most-impacted by the outbreak would receive additional aid. The remaining third would be based on overall revenue losses.
While GOP lawmakers are opposed to including additional aid for states in the emerging deal to replenish the government’s Paycheck Protection Program, which provides forgiveable loans to small businesses, Cassidy said he’s confident enough Republicans would support additional stabilization aid in the next broad stimulus bill.
President Donald Trump also said over the weekend he hoped additional aid for states could be incorporated in the next stimulus package.
Cassidy argued that maintaining essential services like police, trash collection, emergency response and fire protection is critical to economic recovery.
“Previous efforts have been directed primarily to make sure individuals, families and small employers are prepared to go through this rough patch so that when we come out on the other side, they are intact,” Cassidy said. “A key portion of that is to preserve the ability of municipalities and state governments to provide essential services.”
Menendez also said states and towns are the front lines of the pandemic need more financial help as soon as possible.
“I understand the incredible toll fighting this pandemic is having on our towns and states on the front lines, both waging the war and continuing to support their local health departments, teachers, first responders, parks and a whole host of other services. Now try doing that when all the revenues that had been budgeted have dried up,” Menendez added.
Gov. Phil Murphy, who chairs the Democratic Governors Association, warned over the weekend that absent significant federal support, the only alternative would be “historic” numbers of layoffs at the state, county and local levels.
On Monday, he said he spoke to Trump about the issue during a private conversation that morning.
“The president said it was his hope could be part of the next stimulus,” Murphy said. “We can’t wait another minute longer.”
The National Governors Association has also called for the federal government to provide both $500 billion in additional aid, as well as flexibility to use funding from the CARES Act as revenue replacement for government services that aren’t specific to the COVID-19 fight.
“We must be allowed to use any state stabilization funds for replacement of lost revenue, and these funds should not be tied to only COVID-19 related expenses,” Maryland Gov. Larry Hogan, who is the NGA’s chair, said in a statement.