Coronavirus Relief: Pelosi Proposes $1 Trillion In Pandemic Aid To State And Local Governments Strapped For Cash

Democrats will seek $1 trillion for cash-strapped state and local governments in the next coronavirus relief bill, along with billions more to help employees, businesses and families that need help to weather the crisis, House Speaker Nancy Pelosi said Thursday.

“This is strictly about the coronavirus. It is about what your outlays are for the virus and what your revenue loss is on that,” Pelosi said. “We’re not going to be able to cover all of it, but to the extent that we can keep the states and localities sustainable, that's our goal.” The $1 trillion figure is much higher than what was discussed earlier.

Though Senate Majority Leader Mitch McConnell softened his stance against granting help to state and local governments, it was unclear whether he would go along with Pelosi’s proposal.

New Jersey Gov. Phil Murphy, who met with Trump in the Oval Office Thursday, said his state is taking a $20 billion to $30 billion hit as a result of dealing with the COVID-19 pandemic. He said he doesn’t see federal help as a “bailout,” rather, he said, the funds are needed to “allow us to keep firefighters, teachers, police EMS on the payroll, serving the communities.”

Public sector workers were bracing for a wave of mass layoffs.

The House likely will not reconvene until mid-May while the Senate is scheduled to end its recess Monday. Both leaders have said their chambers will develop their own bills, which has been dubbed CARES2 as a follow-up to the $2.2 trillion relief package enacted last month.

Lawmakers passed a nearly $500 billion measure last week that provided more funds for the Small Business Administration Paycheck Protection Program, as well as funds for hospitals and testing.

Sen. John Cornyn of Texas, a member of the GOP leadership, called Pelosi’s $1 trillion proposal “outrageous.” He said state and local governments already had received $150 billion under the March bill. He said he would be willing, however, to lift some of the restrictions on how the money can be spent.

McConnell earlier said he opposed more funds for states, saying they should consider declaring bankruptcy instead – a proposal heatedly rejected by several governors including Andrew Cuomo of New York and J.B. Pritzker of Illinois, two states suffering from crushing public pension fund obligations.

McConnell said this week he might be open to aid to state and local governments, as long as it was tied to increased liability protections for businesses that reopen to protect them from litigation.