PROVIDENCE, RI – Today, U.S. Senator Jack Reed (D-RI) announced that the federal government has wired $625 million to Rhode Island through the Coronavirus Relief Fund for states that Senator Reed championed in the Coronavirus Aid, Relief and Economic Security (CARES) Act (Public Law No. 116-136).  These federal funds, which is half of the state’s allocation, are now in the state’s account and may be used to help Rhode Island meet its financial obligations as the state marshals resources to care for citizens and effectively combat the novel coronavirus (COVID-19) pandemic.

Senator Reed stated: “This is a significant wave of fiscal cavalry in the state’s battle to save lives and help communities amidst a pandemic.  I want the full allocation deployed quickly, and I’m already working to secure the next round of assistance.  Whether it’s a public health emergency, an economic crisis, or in this case both, a swift, coordinated, and effective response is critical.  We must deploy aid where it is most needed.  This is an important start, but our work is far from over.”

Like patients, states are in varying stages of their battle with COVID-19 and have different underlying fiscal health issues.  But while the pandemic is impacting states at different times and in uneven waves, every state and U.S. territory will feel the shocks from a slowing U.S. and global economy coupled with declining revenues and rising costs as they work to save people’s lives and livelihoods. 

Senator Reed praised Governor Gina M. Raimondo for her strong, steady leadership, and noted the financial strain all states are facing:  “Governor Raimondo has done a remarkable job, but no state can do it alone.  They need federal backup to save lives.  There is a real danger that inaction by the Trump Administration could erode public health and safety and lead to our communities and taxpayers being financially overwhelmed and overrun.  This isn’t a windfall, and it won’t shield states from severe economic pain, but it will blunt the trauma and boost the state’s response and recovery capabilities.  It should give every state a fighting chance, and I will continue working with the Treasury Department to ensure states have maximum flexibility to put these funds to proper, effective use.”

Senator Reed took a lead role in creating the $150 billion Coronavirus Relief Fund for states in the CARES Act and included a $1.25 billion small state minimum.  Under the law, the U.S. Department of Treasury must disburse all $1.25 billion to the state no later than April 26.  While Treasury is releasing the first half of the money this week, states are still waiting on final guidance regarding how the funds may be spent. 

Senator Reed is urging Treasury to faithfully execute the law and is confident Governor Raimondo will wisely utilize this funding to benefit the state and protect health and the health of our economy.  Reed wants Treasury to help ensure the funds can be targeted to areas of greatest need.

Reed noted: “The law was written to help states cover all appropriate costs related to COVID-19.  A plain text reading of the statute clearly should permit lost or delayed revenue as a result of COVID-19 to be a “cost.”  I will continue pressing the Trump Administration to follow the law and provide states with the clear guidance they need to ensure the funds are wisely spent in areas of greatest need.” 

Reed continued: “This is a critical moment.  If the Trump Administration needlessly restricts this aid now it could exacerbate public health problems and prolong financial hardship.  We all want America’s economy to snap back quickly, but we need a strategy and resources to deal with reality.  This is likely to be a very challenging period.  Through better testing, science, and ingenuity, we’re going to adapt, beat this virus, and get our economy working again.  But that won’t happen overnight.  If the Trump Administration tries to jam Governors now with unfair and unnecessary restrictions, it will be a real setback for Americans in all fifty states.”

Senator Reed is already working to provide additional state stabilization assistance in an interim coronavirus emergency relief bill that is being negotiated with Treasury Secretary Steven Mnuchin.  The interim package would also provide additional money for small businesses and hospitals, local governments, and supplemental nutrition assistance.

Senator Reed initially called for a $750 billion state stabilization fund, while Senate Republicans called for zero and tried to block the inclusion of these state funds.  But Senator Reed enlisted the help of Republican state leaders who also sounded the alarm, and Congressional Republicans agreed this was a smart, cost-effective investment in staving off a deeper and longer economic catastrophe.  Ultimately, negotiators agreed to include $150 billion for the program in the CARES Act, with a state minimum of $1.25 billion at Senator Reed’s insistence.

The $150 billion in additional assistance for state and local governments being negotiated in the interim emergency relief package would enhance aid to states and communities, but with a significantly lower small state minimum of $500 million.