NY likely will get less stimulus aid the longer the bill's passage is delayed

WASHINGTON — The longer the White House and Senate Republicans keep a new coronavirus aid package on pause, the less money New York State is likely to get from a fund for states based on their share of the nation’s cases of infection, lawmakers acknowledged last week.

New York State could be awarded billions of dollars less than the amount announced when the House passed the $3 trillion Heroes Act on May 15, depending on if and when Congress enacts a bill with an infection-rate-based fund for states and whether New York cases continue to decline, as some forecasts suggest, a Newsday analysis found.

Rep. Thomas Suozzi (D-Glen Cove), who led a letter to congressional leaders requesting House leaders add that special fund to the final bill, acknowledged that the act as written would diminish New York’s share of the funding over time if its caseload continues to decline.

“I want our percentage [of COVID-19 cases] to go down. That's good for New York,” Suozzi said in a phone interview. But he added, “I'll work with others to see if we can advocate to increase the $49 billion fund to be a bigger pot of money.”

Already, in the nearly two weeks since House Democrats passed the Heroes Act, New York State’s allotment from the bill’s $49 billion program to aid states and Washington, D.C., based on their percentages of national COVID-19 cases dropped by $1.1 billion.

That’s because during that time, New York’s share of U.S. cases dropped by 2 percentage points from about 24% to 22%, the biggest decline of any state, according to the daily tally by the Centers for Disease Control and Prevention.

New York still would get about $10.7 billion from the $49 billion fund as of the end of last week. But that amount is down from $11.8 billion when the House passed the bill. 

If Congress waits until the end of June to approve that fund as part of an aid package and New York continues to see its percentage of cases drop 1 percentage point a week, New York State’s share of that fund could plunge by about $2.4 billion, to a total of $9.4 billion.

New York and other hard-hit states with shrinking coronavirus caseloads would face a similar downgrade of their share of federal aid under a bipartisan Senate bill that would distribute $166 billion to states and localities based on their percentages of U.S. cases.

But the purpose for the infection-rate base for funding is to ensure that states with the most cases get extra money to help them address the pandemic — and the formula shows it is doing that even if New York gets less money than it initially thought it would.

The share of U.S. cases since the Heroes Act passed on May 15 declined in 13 states led by hard-hit New York, New Jersey, Massachusetts and Michigan but increased in 33 states led by California, Illinois, Virginia and Minnesota, according to CDC tracking data through Friday. 

Sill, Rep. Peter King (R-Seaford), the only Republican to vote for the Heroes Act, said, “New York really shouldn't be penalized for success, for doing the right thing.”

And Rep. Nita Lowey (D-Rye), who as chair of the House Appropriations Committee incorporated Suozzi’s bill into the Heroes Act, said in a statement, “It is absolutely imperative that New York’s state and local governments get the help they so desperately need. New Yorkers at the epicenter of this pandemic can’t afford continued Republican foot dragging.”

Neither Senate Majority Leader Mitch McConnell (R-Ky.) nor the White House has commented on the diminishing funds for New York.

Aside from the infection-rate-based fund, the Heroes Act would award New York significant money — including about $13 billion based on its share of U.S. unemployed workers and $2 billion from a $102 billion fund divided among the states and Washington, D.C.

Ironically, it was the bipartisan New York and New Jersey delegations to the House that on April 14 requested that the Heroes Act include at least a $40 billion fund to help the states hardest hit by the pandemic by basing it on share of overall U.S. cases.

Those lawmakers were angry that the Trump administration distributed the first $30 billion to hospitals and health care providers not based on coronavirus cases but on a previous year’s Medicare payments.

At that time, New York had nearly 35% of the nation’s cases, and would have gotten about $13.8 billion from a $40 billion fund.

The White House and McConnell have called for a pause in new legislation while they assess the $2.5 trillion already approved for individuals, small and large businesses, unemployment claims, hospitals and health care providers, and state and local governments.

U.S. Treasury Secretary Steven Mnuchin has not begun formal negotiations with House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) over the House Democrats’ bill, the Heroes Act.

“I think there is a strong likelihood we will need another bill,” Mnuchin said Thursday, “but we just have $3 trillion we're pumping into the economy, and we're going to step back for a few weeks and think very clearly how we need to spend more money and if we need to do that.”

But Suozzi added, “Pressure will continue to mount on Senator McConnell and the Senate to take action and start negotiating resolution on the Heroes Act, and you know one thing that's nonnegotiable is the funding that will go toward the state of New York. The New York delegation is united in that fight.”