House Revives Negotiations on Local Budget Relief with Anticipated New Aid Package Proposal

September 25, 2020 - (3 min read)

After weeks of bipartisan pressure from House Members in competitive races, Speaker Nancy Pelosi is likely to introduce a slimmer $2.4 trillion COVID-19 emergency aid proposal early next week. Although the proposal is being finalized by House committee leaders, the package is expected to include an undetermined amount of additional aid to local governments, as well as other economic supports for companies and individuals hard-hit by the pandemic.

A week earlier, the bipartisan House Problem Solvers Caucus released their $1.5 trillion “March to Common Ground” framework for a new compromise aid package, hoping to restart the stalled negotiation process between the House, Senate, and White House. NLC thanked the group for prioritizing aid for state and local governments in their proposal. Although House leaders declined to advance the proposal, their call for renewed negotiations appears to have made an impact.

Until the Speaker’s new offer is released, prospects for a deal before the election remain uncertain. Without waiting for the details, a handful of lawmakers have already dismissed the proposed package total as still far too high, although it is a reduction from the more than $3 trillion proposed by Democrats at the start of negotiations in the summer.

The House may vote on the new proposal next week, leaving very little time for bicameral, bipartisan negotiations or engagement with the Administration’s lead negotiator for emergency aid, Treasury Secretary Steve Mnuchin.  Both chambers are expected to recess by the first week of October for an in-district work period until after the election in November. After the Senate votes next week on the continuing resolution to fund the federal government through December 11, there will be no essential legislation remaining to keep Members from returning to the campaign trail.

Despite those headwinds, economists across the political spectrum continue to urge Congress to provide additional aid to local governments. The conservative American Enterprise Institute in August predicted that without additional support, local governments will rapidly spend through any reserves and be forced to make budget cuts that act as a drag on the nation’s economic recovery. This week, the progressive Brookings Institute raised similar concerns, also noting that local governments are on the front lines of coronavirus response, managing public health and safety day-to-day while grappling with budget craters.

As Members of Congress return home for the final stretch of their reelection campaigns, local leaders will have another opportunity to weigh in with their Congressional delegations. Cities and towns have made a sound case that federal aid is warranted to address local revenue shortfalls resulting from emergency shutdowns to contain the spread of coronavirus. But Members of Congress also want to know how local governments would allocate emergency federal aid. Use our Cities Are Essential campaign tools and resources to call, tweet, or meet with your congressional delegation while they are at home to hold their feet to the fire and ensure they understand what tough decisions your community is being forced to make while Congress remains gridlocked.

Irma Esparza Diggs small About the author: Irma Esparza Diggs is a senior executive and director of federal advocacy at the National League of Cities. Follow Irma on Twitter @iediggs.