A Closer Look at the New COVID Deal: What Local Priorities Made the Cut?

By:

Angelina Panettieri

December 21, 2020 - (4 min read)

Over the weekend, House and Senate leaders reached agreement on an omnibus deal to fund the federal government and provide a new round of COVID-19 relief – absent direct aid to local governments, despite months of advocacy from communities, economists, and legislators on both sides of the aisle. The package is expected to pass both the House and Senate this week, although another short-term continuing resolution may be required to keep the federal government funded and allow the bill time to work through procedural steps.

NLC Executive Director and CEO Clarence E. Anthony noted in response, “It is beyond disappointing that after months of watching our hometowns and our local economies ravaged by COVID-19, congressional leaders have failed to deliver critical support for the first responders, public safety personnel, and municipal officials who have worked tirelessly to keep our communities safe since the beginning of the pandemic. As COVID-19 cases rise across the country and local officials race to put in place the infrastructure to distribute vaccines to their residents, there has never been a more important moment to deliver the critical relief our communities. While we appreciate the limited provisions aimed at temporarily alleviating the financial pain in our communities, these measures are woefully inadequate to address the systemic and long-term challenges facing local governments due to the pandemic.” Read NLC’s full statement on local governments’ absence from the final bargain.

The package fails to provide any additional direct relief to state or local governments, although it does extend the deadline for using unspent funds from the Coronavirus Relief Fund to December 31, 2021. The deal does not provide additional flexibility for the use of those funds. The package also fails to increase the federal cost share for the Federal Emergency Management Agency (FEMA) Public Assistance grants to 100 percent. Instead, the package provides FEMA up to $2 billion in assistance through states for families with funeral expenses due to COVID through December 31, 2020. It requires FEMA to provide this assistance and waives an otherwise required 25% state match.

Despite the failure on the part of Congress to provide much-needed aid to struggling communities, the bill does contain some potential bright spots for businesses and residents in need. The final package includes aid for struggling households, in the form of an additional round of $600 stimulus payments, a $300 unemployment insurance supplement through March 14, 2021, and extensions to the Pandemic Unemployment Assistance program for self-employed or gig workers and the Pandemic Emergency Unemployment Compensation program, which covers unemployment for workers who exhaust state benefits.

Other top-line totals in the relief package include:

$25 billion for rental assistance,
$325 billion in small business aid ($284 billion of which is another round of modified PPP loans, along with $20 billion in Economic Injury Disaster Loan Advance Program funding and $15 billion to support closed performance and entertainment venues),
$45 billion for transportation, including $14 billion in additional transit support, $10B in additional surface transportation block grant funding that can be used directly by communities above 200,000 and across the state, as well as $2 billion additional for primary and general aviation airports,
$54.3 billion for public K-12 schools, $10 billion for childcare (funding the Child Care & Development Block Grant and Head Start),
$13 billion for the Supplemental Nutrition Assistance Program,
$7 billion for broadband ($3.2 billion of which is dedicated to a low-income broadband emergency subsidy for households, and another $300 million for rural broadband), and
$4.25 billion to provide increased mental health and substance abuse services and support, including $1.65 billion for the Substance Abuse and Prevention Treatment Block Grant.

In addition to COVID aid, the “Christmas tree” legislative package includes funding for federal programs mostly at level or slightly increased funding from FY2020 through the end of September 2021 and a number of policy reauthorizations and actions important to cities, including the Water Resources Development Act, the Don’t Break Up the T-Band Act, energy provisions, and tax extenders.

After the COVID assistance and federal funding package is passed into law, NLC will continue to advocate for cities and their residents to access as many of these resources as possible. While some programs, such as the stimulus payments, are expected to move quickly, others will require a brief rulemaking process or additional guidance from federal agencies before they can reach communities, families, and businesses.