Pelosi floats almost $1T for states in next relief package

Speaker Nancy Pelosi (D-Calif.) said Thursday that Democrats will push for including almost $1 trillion in the next coronavirus relief package to help states and local governments hit hard by the pandemic.

That figure, Pelosi said, would likely be the single largest line-item of the Democrats’ next emergency package, known as CARES 2, which is also expected to include hundreds of billions of dollars more to help workers, businesses and families weather the crisis.

“We’re not going to be able to cover all of it, but to the extent that we can keep the states and localities sustainable, that’s our goal,” Pelosi told reporters in the basement of the near-deserted Capitol.

It means the Democrats’ next emergency relief proposal is likely to approximate the massive size of the initial CARES Act, adopted March 27, which provided $2.2 trillion in emergency help largely for major industries and small businesses left devastated by the economic fallout of the global pandemic.

It also foreshadows a fierce fight with Republicans in the Senate, where GOP leaders had rejected any new funding for state and local governments in the last “interim” coronavirus bill, enacted last week, and are wary that any new help for states going forward would simply bail out governors for fiscal mismanagement preceding the health crisis.

“That strikes me as a pretty outrageous number, just for state and local support,” Sen. John Cornyn (R-Texas) told reporters in the Capitol, shortly after Pelosi floated the $1 trillion figure. “We’ve already provided $150 billion in CARES 1.”

Senate Majority Leader Mitch McConnell (R-Ky.) has said he’d prefer to see the states declare bankruptcy than grant them more federal help.

Senate Republicans, he warned last week, won’t support “revenue replacement for state governments” or “solving their pension problems.”

McConnell’s critics have been quick to point out that Kentucky, where the Senate leader is seeking reelection this year, receives many billions of dollars more from Washington than its residents pay in federal taxes.

And Pelosi on Thursday dismissed McConnell’s opposition, saying Democrats are prepared to go to the mat to ensure that medical workers and other first responders are not laid off as a result of the economic crunch facing states around the country, which have seen tax revenues plummet amid the crisis.

“They’re risking their lives to save lives, and now they’re going to lose their jobs? It’s just stunning, and we have to address it,” Pelosi said. “This isn’t about any other budget issues for states; it’s about the coronavirus outlays [and] revenue lost.”

Pelosi said that assistance could arrive in as many as three separate “tranches” — providing aid to hard-hit states, counties and municipalities — and could extend for three or four years, providing long-term help as the economy stabilizes.

“It’s not just for one year,” she said. “It’s over time.”

Aside from the state funding, Democrats in CARES 2 are also eyeing vast new spending for direct cash payments to individuals, medical equipment and unemployment insurance, which has taken on new gravity as roughly 30 million people have filed for jobless benefits over the last six weeks alone.

Democrats are also fighting to include tens of billions of dollars to expand broadband services around the country, particularly in rural and other underserved regions, where students and medical providers have had a tougher time accessing the internet during the crisis.

“The only way you can have online learning is with broadband,” said Rep. James Clyburn (D-S.C.), the House majority whip and leading champion of the broadband provisions.

The timing of CARES 2 remains unclear. While the House was initially scheduled to be in session next week, Democratic leaders scrapped that plan on Tuesday, citing the advice of the Capitol physician. And Pelosi on Thursday set a tentative return date for the week of May 11, although committees are expected to be back earlier to work on CARES 2.

“We’re not coming back this week. Our plan is to come back the following week,” she said.

Clyburn, who is heading a newly created committee overseeing coronavirus spending, said that panel will likely meet next week in Washington.

Pelosi on Wednesday had named six additional Democrats to that committee. It remains unclear, however, if House Minority Leader Kevin McCarthy (R-Calif.) will designate any Republicans to participate on the panel, which GOP lawmakers have characterized as a political tool for attacking President Trump.

Amid the uncertainty, Pelosi on Thursday ruled out at least one strategy: The House, she said, would not take up another interim bill, like last week’s $484 billion package, which went largely toward replenishing small business loans under the Paycheck Protection Program.

“We’re all for that, and we just did do an intervention. But we must do a CARES bill now. We cannot put that off,” she said. “Our next plan will be CARES 2.”