Summary List PlacementAid for local governments has been framed as a “blue state bailout” by some Republicans, including Senate Majority Leader Mitch McConnell and outgoing President Donald Trump. That aid, in turn, has stalled in Congress, with reluctant conservatives tying any agreement to help struggling cities and states with indemnity for businesses facing potential litigation over their actions during the pandemic, a deal-breaker for most Democrats.
The logjam over another stimulus package — amid the worst surge yet in COVID-19, sending a record number of people to the hospital — has prompted a coalition of local leaders in the Midwest and Deep South to speak out.
In a statement, 150 mayors, representing areas from the Great Lakes to the Gulf of Mexico, rebutted the red vs. blue rhetoric at the national level and urged lawmakers to provide “urgently needed financial relief for cities and towns that have borne the brunt of the impact from the pandemic.”
The message echoes that of Mayor Dee Margo of hard-hit El Paso, Texas, who in a recent interview with Business Insider spoke of the tension between protecting public health and ensuring the city and its businesses do not go bankrupt. “We need more help,” the Republican put it bluntly.
A $748 billion stimulus package backed by a bipartisan group of senators, unveiled this week, omits any support for state and local governments, focusing instead on aid to small businesses and a temporary increase in unemployment payments. A second, $160 billion proposal (“less of an emergency but also important,” in the words of Republican Sen. Bill Cassidy of Louisiana) would provide aid to local governments in exchange for blocking most lawsuits against companies related to COVID-19. (According to a report from NBC News, McConnell said he’d drop the lawsuit shield provision if Democrats drop. the funding for state and local governments.)
In their statement, the group of mayors urged lawmakers to treat aid to their cities as an emergency priority.
“The pandemic is reaching critical levels now as contagion sweeps through our states unabated,” Kyle Moore, the Republican mayor of Quincy, Illinois, said Tuesday. “It is imperative that we have resources available through the stimulus package to effectively maintain city services and deploy the pending vaccines.”
Mike Vandersteen, mayor of Sheboygan, Wisconsin, chair of the Great Lakes and St. Lawrence Cities Initiative, and a Republican, urged Congress to pass a relief bill before adjourning.
“Regardless of how it is structured, it is imperative that Congress approve revenue replacement for local governments to ensure the swiftest possible recovery from the pandemic,” Vandersteen said.
On Tuesday, McConnell, the top Republican in the Senate, vowed to stay in Washington until a “COVID package” is passed, although he did not specify what that package would include.
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In a survey of 130 mayors across the country released earlier this month, 45% of city leaders said they expected serious cuts to public education, social services, and transportation budgets due to a drop in tax revenue brought about by the pandemic. Over 85% said the federal government’s assistance had been insufficient.
In an interview with Business Insider earlier this year, Nobel Prize-winning economist Paul Krugman warned of a “huge fiscal time bomb” as the pandemic subsides because state and local governments cannot run a deficit, unlike the federal government, and they are collecting less revenue during the pandemic and spending more.
“It’s going to be a lot like what happened after the 2008 crisis when layoffs of school teachers, layoffs of government employees were a big factor in holding back recovery and we’re going to be —,” Krugman said. “Yeah, just as the pandemic starts to fade, we hope, we’re going to be seeing state and local governments cutting back severely.”
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