There’s little chance of agreement on a new federal coronavirus relief plan without a compromise on the roughly $1 trillion in aid to beleaguered state and local government that Democrats demand and the White House opposes.
Democrats have offered to cut their original stimulus proposal totaling $3.5 trillion by roughly one third, but insist on keeping help for states, cities and other municipalities. President Donald Trump’s negotiators, in addition to rejecting the Democrats’ topline number, have offered to put in no more than $150 billion for local assistance.
Negotiations are at a standstill heading into two weeks in which the Democratic Party then the Republican Party hold their respective presidential nominating conventions.
Senate Majority Leader Mitch McConnell said Thursday the Senate is in recess and will not hold votes until Sept. 8 -- although senators, like members of the House, can be called back on 24 hours notice if a stimulus deal has been made.
“I’m still hoping we’ll have some kind of bipartisan agreement here, some time in the coming weeks,” McConnell said as he left the Senate floor.
The chasm between the two sides, and potential for the impasse to stretch well into September, has governors and mayors from both parties on the edge.
“This is not about ‘bailing out’ red states or blue states for pension problems or to make up for previous policy failures of other states -- this is about delivering rapid relief for states so the governors can manage and provide flexibility for their residents,” New Hampshire’s Republican Governor Chris Sununu tweeted this week.
“If we do not get federal help we have very difficult, no-win choices to make on the cut on local services, particularly our police and fire services,” Dayton, Ohio, Mayor Nan Whaley, a Democrat, said on a recent conference call organized by the U.S. Conference of Mayors.
Although there are other areas of disagreement -- among them, McConnell’s plan to shield employers from liability for Covid-19 infections, and House Speaker Nancy Pelosi’s drive to bolster the U.S. Postal Service -- the question of state aid may be the biggest stumbling block.
Senate Republicans included no aid for local governments in their initial proposal for the next stimulus bill released at the end of July. It did include $105 billion for schools, which are mostly funded by states and cities, and $16 billion in grants to states for coronavirus testing, contact tracing and surveillance.