Aid to states will be bone of contention in next coronavirus stimulus bill

WASHINGTON — Nearly $1 trillion in aid to state and local governments stands at the core of the 1,800-page coronavirus aid bill with hundreds of measures and a $3 trillion price tag that House Democrats approved Friday, lawmakers said last week.

That aid, they said, also will be a bone of contention when Democrats negotiate with Senate Republicans and the White House to shape the fifth major spending bill in three months, which now proposes to more than double the money already approved to address the pandemic.

Yet more funds for state and local governments staggered by revenue losses and pandemic expenditures are widely expected to be in the final aid package, but only after a fight over how much, how soon, under what rules and at what political price each side will pay.

“There is consensus that something needs to be done here and it will be part of the next stimulus package,” said William Hoagland, a longtime Republican Senate aide and senior vice president of the Bipartisan Policy Center, a Washington think tank.

President Donald Trump on Friday told reporters that a phase-four coronavirus aid bill "is going to happen," but he added that "it will happen in the right way." He did not explain what he meant.

House Speaker Nancy Pelosi (D-Calif.) crafted the bill, which includes $500 billion for the 50 states and the District of Columbia, $20 billion for territories and tribal governments and $375 billion for local governments including counties, cities and smaller municipalities.

New York State’s share would be $34.4 billion over two years, with about $21 billion of that amount to be delivered within 30 days of the legislation’s enactment, and the rest next year, according to estimates. Gov. Andrew M. Cuomo last week said the state needs $61 billion over two years or he will have to cut funding for schools across the state by 20%.

The House approved Pelosi's bill in a 208-199 vote Friday evening, with 14 Democrats voting no and one Republican — Rep. Peter King (R-Seaford) — voting for it. The bill now goes to the Senate.

A Senate vote on a compromise package probably won’t happen until late June, after negotiations between Democrats pushing the bill and the White House and Republicans wrap up, and it could drag out into the summer.

Senate Majority Leader Mitch McConnell (R-Ky.) and Treasury Secretary Steven Mnuchin, the White House stimulus negotiator, both have called for a pause in new funding while they assess how the $2.5 trillion already approved is being spent.

“We did approve $150 billion that's going to the states for coronavirus expenses. We also approved it could go to police officers, firemen, first responders, so we made sure that none of those people got laid off given, what they're doing protecting us,” Mnuchin said on Thursday.

“But, for now, we don't need more money in the states. We need to see how this plays out,” he said.

McConnell has laid down his “red line” for approval of more state and local aid: passage of liability limits on employers against lawsuits over working conditions related to COVID-19. Democrats have called that proposal a nonstarter.

And McConnell, who has been less flexible in his approach to negotiating, may not be content to allow Mnuchin to take the lead again. “I’ve had staff tell me that Sen. McConnell is going to ‘hold the pin this time,’ which is a way of saying he feels like maybe the last couple of bills, he didn't have control,” Hoagland said.

Pelosi and Senate Minority Leader Chuck Schumer (D-N.Y.) are pushing for quick passage of the aid package. But so far, Pelosi said, she has not spoken with Mnuchin.

“Mitch McConnell is the Senate’s barrier in preventing New York State and its localities from getting the money they need — and deserve — to keep cops, firefighters, teachers and transportation workers on the job. We are fighting him tooth and nail,” Schumer said in a statement Sunday.

Pelosi and Schumer are relying on pressure from powerful groups such as the National Governors Association, U.S. Conference of Mayors and National Association of Counties, as well as the Democratic coalition partners, to get the Senate to the table and to hold a vote.

“I'm optimistic that the American people will weigh in and make their views known,” Pelosi said.

But McConnell and the White House also face pressure from Federal Reserve Chairman Jerome Powell, who last week said, “Additional fiscal support could be costly but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery.”

A much slimmer package, possibly worth $1 trillion or so, is expected to emerge from negotiations, with many Democratic wish-list issues sliced away and the funding to state and local governments trimmed back.

Rep. Lee Zeldin (R-Shirley) said he believes Congress will approve aid to state and local governments, but not at the level that Pelosi’s bill proposes. “You’re including more money than anyone's asking for, like on the high end,” he said. He voted no on the bill.

A key priority for Rep. Thomas Suozzi (D-Glen Cove) is to protect and retain a $49 billion pool of money he proposed that would be distributed based on the number of confirmed coronavirus cases, which he said would bring about $12 billion to New York.

King said he voted for the bill because he wants to get badly needed federal funding flowing to New York. He said, “The Senate should do its job and get it back to us by next week.”