Reed Introduces his State and Local Emergency Stabilization Fund Act on the Senate Floor
Mr. President, in order to build on a key provision I authored in the CARES Act, which provided states with $150 billion in Coronavirus Relief Funds (CRF), I am introducing the State and Local Emergency Stabilization Fund Act so that States and local governments can continue to be supported as they shoulder the costs of battling the corona virus.
The State and Local Emergency Stabilization Fund Act would cut needless red tape that was bureaucratically imposed by the Trump Administration, which is constraining States from spending the CRF money that Congress unanimously approved to save lives and help rescue our economy. My legislation makes it clear that lost revenue is a cost. It also extends the time horizon States have to spend the money in order to ensure they have the flexibility to equitably allocate and disburse the funding and help communities combat COVID–19 and recover.
Unfortunately, the costs of responding to the coronavirus and keeping our economy afloat have only increased as result of this Administration’s inability to formulate and execute a public health strategy based on facts and science, or implement effectively the resources and programs Congress authorized to keep our economy afloat. To meet these increasing costs, this bill would provide State and local governments an additional $600 billion in funding. The bill includes a protective $5 billion small State minimum, treats the District of Columbia and the Commonwealth of Puerto Kico as States, and reserves funds for territories and Tribes. In addition, $59 billion would be allocated to States based on their relative coronavirus infection rates, and $205 billion would be reserved elusively for local governments.
State and local governments are being pushed to the financial brink by skyrocketing costs and plunging revenue, and they need stability in order to have a chance at recovery. While some of my colleagues on the other side of the aisle have tried to paint this issue as a ‘red State vs. blue State’ problem, all fifty States are suffering and need financial relief from the Federal government to prevent massive layoffs, cuts to needed services, and future tax hikes.
In addition, on May 6, 2020, CNBC reported ‘‘private payrolls hemorrhaged more than 20 million jobs in April as companies sliced workers amid a corona virus-induced shutdown that took most of the U.S. economy offline, according to a report Wednesday from ADP. In all, the decline totaled 20,236,000—easily the worst loss in the survey’s history going back to 2002 but not as bad as the 22 million that economists surveyed by Dow Jones had been expecting. The previous record was 834,665 in February 2009 amid the financial crisis and accompanying Great Recession.’’
Mr. President, the scale and pace of our public health emergency and the impact it has having on our economy requires each of us to swiftly set aside ideology and work urgently to address these generational challenges head on. Failure to respond in a timely manner will only result in more layoffs and a longer recession. It will mean States and local governments will be left unable to provide needed health, education, public safety, and sanitation services, just when those services are needed most. Any economic recovery needs reliable State and local governments that provide the business certainty that make our attractive to businesses and investors throughout the world.