Federal money for state and local governments is a major sticking point to resume negotiations on the next coronavirus relief package.
The White House and the Congress Democrats are divided on the question of whether states should get more money – and if so, how much.
Before talks came together late last week, the two sides were hundreds of billions apart about how much they were willing to put on the table. Democrats want $ 915 billion, while Republicans offer $ 150 billion, the same amount included in the CARES Act of late March.
There are no signs that the inconvenience will subside, and underline how difficult it will be to climb a deal after negotiations have derailed.
Treasury Secretary Steven Mnuchin
Steven Terner Mnuchin White House Officials, Democrats Spit on Legality, Substance Execution Substance Sunday Shows – Trump Coronavirus Executive Commands Conquer Pelosi: ‘Obviously There’s Room for Compromise’ on 0-Week Unemployment Benefit MAY called the Democratic request for nearly $ 1 trillion in new money “an absurd number.”
“There are enough now, and we have put more money on the table,” he said during an interview with CNBC on Monday. “We are not going to give a trillion dollars for state and local. That is just not a reasonable approach.”
President Trump
Donald John TrumpTrump suggests some states ‘can pay nothing’ as part of Trump’s unemployment plan denies White House asked about adding him to Mount Rushmore Trump, US face pivotal UN vote on Iran MAY and Republicans have run out to Democrats, arguing that they torpedo the talks unless they get bailouts for their home states as part of the next COVID-19 relief.
“Where have they been the last 4 weeks when they were ‘hardliners’, and only wanted BAILOUT MONEY for Democrat run states and cities falling badly?” Trump asked in a tweet about Speaker Nancy Pelosi
Officials from Nancy PelosiWhite House, Democrats spit on legality, substance of executive orders Sunday shows – Trump Coronavirus executive orders reflect Pelosi: ‘Of course there is room for compromise’ on 0-per-week unemployment benefits MAY (D-Calif.) And Leader of the Senate Minority Charles Schumer
Officials at Chuck SchumerWhite House, Democrats Splash over Legality, Substantially Executives Schumer Refuses to Say Whether Trump Executes Legally: They Do Not ‘Work’ Schumer: Idea that 0 Unemployment Workers Keep Workers Out of Work ‘Dislikes Americans’ MORE (DN.Y.) on Monday.
Late last week, the president tweeted that he “had no interest” in giving $ 1 trillion to state and local governments, adding that Pelosi and Schumer were “only interested in bailout money for poorly run democracies and states.”
Leader of the First Chamber Mitch McConnell
Addison (Mitch) Mitchell McConnellTrump signs executive order after coronavirus relief talks falter Coronavirus deal key to Republicans protect Senate majority Coronavirus talks collapse if negotiators fail to reach deal MAY (R-Ky.), Who was not in the chamber for the negotiations, spoke separately to Democrats Monday, claiming they want a “trillion-dollar slush fund.”
“Democrats say no one gets another coin of relief unless state and local governments get about a trillion dollars in extra money,” McConnell added. ‘This is not about COVID. Democrats think they smell an opening they’ve wanted for years, to commemorate Uncle Sam’s decades of mismanagement and broken policies. ”
A Treasury Department report found that by the end of June, state and local governments had spent roughly a quarter of the money previously held by Congress.
But Democrats warn that without a significant influx of new money, state and local governments will have to seriously consider layoffs and cuts to essential services in the midst of a crisis and recession of public health.
Schumer warned of the House of Representatives and warned that the ‘economy is failing’ and ‘state and local governments are cutting back on essential services. ‘
“We will see redundancies, and this is not an abstract concept. You know, the Republicans say ‘the blue states.’ A firefighter is a firefighter. A person driving a bus, a person picking up the trash – these are important jobs. It’s not in there, “Schumer said in an interview Sunday with ABC’s” This Week. “
The coronavirus pandemic has pummeled the budgets of state and local governments, which lost much of their tax base when companies were forced to shut down or reduce capacity to reduce the spread of COVID-19.
The Progressive Center for Budget and Policy Priorities (CBPP) is estimated in July that state governments would have a total budget deficit of $ 555 billion between fiscal 2020 and 2022. That figure does not include budget gaps affecting city and municipal governments.
Budget gaps have, according to CBPP data, already allowed states to make steep cuts, including reduced funding for schools, housing programs and public transportation.
New York Gov. Andrew Cuomo
Andrew CuomoOn The Trail: Pence’s Knives Come From MTV Moves Awards Shows Outside Overnight Health Care: Trump To Take Executive Action After Colonavirus Talks Collapse | Fax official says he would resign if politics pressed MORE (D), the chairman of the National Governors Association (NGA), and Arkansas Gov. Asa Hutchinson (R), the vice president, issued a joint statement calling for more help for state and local governments and warned the federal government against placing additional spending burdens on the states.
“NGA has requested $ 500 billion in unrestricted state aid and NGA continues to urge Congress and the White House to reach an urgent resolution to provide immediate assistance to unemployed Americans,” the two administrators said. “This resolution must prevent new administrative and fiscal burdens for states. It is essential that our federal partners work together to find common ground to help restore the health of our nation and protect our economy. “
The idea of offering new money to state and local governments has left a huge gap among Republican senators, who included more flexibility in how the $ 150 billion previously saved by Congress could be put into their package spent, but not new money. State officials have cited the rules for restricting the initial $ 150 billion in funding, claiming they made it difficult to use the money to respond to the coronavirus.
There are GOP outliers on both sides of the issue: Some senators, such as Rick Scott of Florida, are opposed to both more money and more flexibility for the funds already allocated by Congress. Others – like Sens. Bill Cassidy
William (Bill) Morgan CassidyFrom a Republican donor to the House of Representatives GOP: Eliminate marriage penalty as risk alienates voters Stimulus controls debate now focuses on big, eligible On the money: GDP shrinks by record amount in second quarter amid virus lockdowns | Jobless claims increase for second straight week | McConnell continues to fight for unemployment benefits MEI (La.) En Susan Collins
Susan Margaret CollinsCoronavirus deal key for Republicans protecting majority in House of Representatives From Republican donor to GOP: Eliminate marriage or risk evading voters The Hill’s Campaign Report: Trump’s visit to Ohio overrun by coronavirus MORE (Maine), re-elected, has passed a bill that would provide state and local governments with an additional $ 500 billion.
“This is probably the area that is the biggest disagreement among Republicans themselves,” Sen. Kevin Cramer
Kevin John CramerThe Hill Coronavirus Report: iBIO President and CEO Thomas Isett says developing a secure vaccine is important; US surpasses 150,000 coronavirus deaths by roughly one death per minute McConnell tees up showdown over unemployment benefits First Chamber panel removes confirmation for its controversial Pentagon nominee at the last minute MORE (RN.D.) said during an interview with CNBC.
The stalemate resolution over more state and local funding is, according to Mnuchin, one of the two biggest obstacles to getting a deal on a package of coronavirus. Trump took no action on the issue when he signed executive orders over the weekend. Unemployment insurance – the other big sticking point, according to Mnuchin – was one of the items addressed by Trump’s executive actions.
Mnuchin notes that the White House has called on Democrats for “a specific compromise on state and local and a specific compromise on unemployment. We have not received any proposals on this. “Both sides have not spoken since the talks appeared collapse on Friday.
“I think if we can reach an agreement on state and local and unemployment, we will reach a general deal,” Mnuchin said. “And if we can not, we can not.”
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