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House Trains Relief Cannons at Yawning State & Local Budget Gaps…

Rep. Neal modeling this season’s haute mask-wear. (WMP&I)

SPRINGFIELD—On Wednesday, United States Representative and House Ways & Means Chair Richard Neal spoke at the Federal Courthouse to extol the virtues of the $3 trillion COVID-19 package House Democrats expect to pass this week. However, with COVID-19 more transmissible indoors and federal buildings less accessible, the briefing took place on the steps, with the press and the congressman competing with traffic, an unexpected flyover by military jets and decrepit mufflers.

Such is the milieu in the era of COVID-19. The package will provide billions in relief to states and localities whose budgets have been gutted by the outbreak and efforts put in place to contain it. The bill would bolster unemployment benefits, stimulus payments to families with dependents, food stamps and health programs.

Democrats know about Republican objections to the bill. However, Neal was somewhat hopeful that Senate Majority Mitch McConnell would carry the day when a bill finally emerges from Congress.

“I understand this is a document of negotiation,” Neal said. “I also would point out that while Senator McConnell has repeatedly said that this is nonstarter in the Senate, he has said that in the previous rounds of negotiation as well.”

Indeed, Neal waved off suggestions that “formal” negotiations had ended. Rather, Neal noted he was still speaking to his Republican counterpart on the committee and that conversations more broadly were on going.

“I don’t know that negotiations ever really break off,” he said.

Previous rounds of relief and stimulus passed, primarily via Treasury Secretary Steven Mnuchin shuttling between Democratic leaders in both houses of Congress and Republicans.

Rules Chair James McGovern in 2018. (WMassP&I)

As the Ways & Means chair, Neal had a hand in much of the legislation. By his estimate, about 2/3 of its contents came under the purview of his committee. However, with Congress unable to meet easily due to the disease, much of the bill’s construction has been done remotely and over the phone rather than public session.

When the House returns later this week, it will also consider institution of proxy voting. That will allow the body to function without all 435 members and their staffs wandering the tight corridors and spaces of the US Capitol complex.

The failure to institute some remote or proxy voting had drawn criticism from the left and some members, who feel Democrats have ceded the stage to Donald Trump during the crisis.

The House Rules Committee will consider the resolution alongside the new COVID-19 relief bill on Thursday, according to a committee press release. Rules Chair James McGovern, a Worcester Democrat who represents parts of Hampshire & Franklin counties, had supported the proxy voting rule earlier. However, he publicly concurred with House Speaker Nancy Pelosi’s decision to postpone a vote to seek accord with Republics.

Those attempts seem to have gone kaput, though Dems incorporated some GOP ideas into the rule. For example, executive sessions of committees cannot be remote.

Neal flashes his congressional voting card. Members use this to vote and a system logs the exact time and location of their vote in the chamber. (WMP&I)

“I think you always want to be sure with remote voting, all the technology plays out,” Neal said Wednesday.

Neal noted that committees once allowed proxy voting used. Republicans squelched that after the 1994 election.

The new rules, if adopted, would allow for remote meetings and for members to appoint another member in DC to vote for them by proxy on the House floor. However, it would study actual electronic remote voting. The rules would only last 45 days barring a vote to extend.

On the economics of the COVID-19 bill, dubbed the Heroes Act, Neal noted that the Federal Reserve had kept interest rates low. However, the Fed only sets monetary policy. Congress had to set fiscal policy and the low interest rates made that attractive.

The proposal would give an additional stimulus check of $1200 per tax filer—or $2400 for a couple—plus $1200 for up to three dependents per household. Funds would also be available to filers with college-aged dependents and for those taking care of adults with specialized-care needs.

Since March, unemployment filers have been able to collect an additional $600 on top of their normal state-based benefit. However, that is to expire next month. The new House bill would extend that benefit through next January.

What Sec. Mnuchin can hash out is probably more important than what Sen. McConnell wants. (via wikipedia)

The bill will also make changes to the Paycheck Protection Program. The loan program for small businesses aims to encourage the retention of staff rather than laying people off. While the program has been helpful to some, restaurateurs have often found it confounding. Loans can only be forgiven if 75% of the money go toward payroll. However, fixed costs like rent are the the imminent threats to such businesses. Their employees can’t help generate income to pay these when their  very business is  verbotten.

“I raised that question specifically with the secretary, Neal said, referencing Mnuchin. “They need some flexibility and they need some room on that, for that very reason.”

The bill includes other technical changes to ensure the program’s implementation is more in line with its creators’ intent.

While payments to individuals and businesses affected by the outbreak is a priority, the central element of the bill is relief for state and municipalities. About $900 billion would go to state and local budgets. Smaller municipalities would receive direct aide from this bill, compared to earlier COVID-19 relief bills. However, there would be some discretion for officials.

Neal said the bill’s writers tried to follow the formulas used to allocate funds under the Community Development Block Grant (CDBG) program. For example, Springfield, because of its size, receives CDBG funds directly from the federal government, rather than as a pass-through from the state. The same formulas allocate funds for regular disasters—like the 2011 tornado.

Governors and local leaders would probably still have a lot of discretion about how to spend the funds. Asked about the impending water rate hike in Springfield, Neal said that City Hall here would have to allocate its relief funds under this bill to offset that hike. Although he left the door open to future bills helping municipal utilities more direction.

The Springfield Water & Sewer Commission recently announced a hefty rate hike to maintain its own budget after water usage plummeted during the outbreak and subsequent stay-at-home advisory. The Commission is a distinct legal entity from the city. However, its board is appointed by the mayor and confirmed by the City Council.

Despite McConnell’s preemptive hissy fit about the bill as Democrats were writing it, Neal observed the Senate Majority has recognized the need to allocate funds for state and local governments.

Because of that, the Democrats’ bill may get some Republican support. On Wednesday night, The New York Times’s Maggie Haberman reported that retiring Long Island Republican Peter King would support the bill and he expects others will as well.