Congress remains divided on next pandemic-relief package; aid to state and local government at risk.

Yesterday House Democrats released a $3 trillion coronavirus package. The Wall Street Journal reports,

The proposed legislation lays down a marker for where House Speaker Nancy Pelosi (D., Calif.) plans to take future negotiations with the Republican-controlled Senate and the Trump administration. It includes more than $1 trillion for states and local governments, including funding for education and public safety.

The House is expected to return to Washington to vote on the bill Friday, but negotiations with Senate Republicans aren’t expected to start until later this month at the earliest.

The House proposal  faces tough sledding in the Senate.

Top Senate Republicans were quick to dismiss the legislation’s prospects in the chamber they control, denouncing the bill as an empty and unrealistic publicity stunt.

And without buying into the “publicity stunt” rhetoric, House Democrats concede the proposal is the first step in a process.

Democrats acknowledge that the bill introduced on Tuesday is an opening bid.

“The larger bill is a negotiating start point,” said Rep. Stephanie Murphy (D., Fla.) in a call with reporters.

Yesterday, Emily Makings with the Washington Research Council wrote about Washington lawmakers support for a trillion-dollar relief package for state and local governments.

Gov. Inslee, House Speaker Laurie Jinkins, and Senate Majority Leader Andy Billig have signed onto a letter asking Congress to provide “$1 trillion in direct and flexible relief to states and local governments.” The letter continues, “Though even this amount will not replace the decline in revenue that we forecast, it will make a meaningful difference in our ability to make-up for COVID-19 revenue losses.” (The letter is also signed by the governors and legislative leaders of California, Colorado, Oregon, and Nevada.)

The National Governors Association has previously asked for $500 billion for states, and the National League of Cities has asked for $500 billion for cities over two years.

The Associated Press reports the $1T for state and local governments is the centerpiece of a wide-ranging proposal.

The Democrats’ Heroes Act is built around nearly $1 trillion for states, cities and tribal governments to avert layoffs, focused chiefly on $375 billion for smaller suburban and rural municipalities largely left out of earlier bills.

The bill will offer a fresh round of $1,200 direct cash aid to individuals, increased to up to $6,000 per household, and launches a $175 billion housing assistance fund to help pay rents and mortgages. There is $75 billion more for virus testing.

It would continue, through January, the $600-per-week boost to unemployment benefits. It adds a 15% increase for food stamps, new subsidies for laid-off workers to pay health insurance premiums under a COBRA law and a special “Obamacare” sign-up period. For businesses, it provides an employee retention tax credit.

With Washington state government facing a $7 billion revenue decline from the pandemic and efforts to contain it, more clarity on federal assistance would be very welcome. The letter signed by Inslee and legislative leaders states,

We deeply appreciated the quick financial assistance you provided workers, small business people and those who have been displaced by this crisis. But now, however, our states will be forced to make deep cuts to programs that help those same individuals without similar relief efforts for state and local governments. Even states that began the year in a strong fiscal position are facing staggering deficits amid growing costs of responding to the crisis. With unemployment projected to surpass that of the Great Recession, we are facing unprecedented and ongoing economic challenges.

Without federal support, states and cities will be forced to make impossible decisions – like whether to fund critical public healthcare that will help us recover, or prevent layoffs of teachers, police officers, firefighters and other first responders. And, without additional assistance, the very programs that will help people get back to work – like job training and help for small business owners – will be forced up on the chopping block.

The extraordinarily challenging public health, economic and fiscal crisis continues to deepen.