Inside208

Congress Passes $900B COVID-19 Relief Package and $1.4T Federal Budget

Posted on December 22, 2020 by John LaMacchia

Over the weekend, House and Senate leaders reached agreement on an omnibus deal to fund the federal government ($1.4T) and provide a new round of COVID-19 relief ($900B) – absent direct aid to local governments, despite months of advocacy from the League, our members, the Nation League of Cities, communities across the country, economists, and legislators on both sides of the aisle. The package passed both the House and Senate Monday night and is awaiting the President’s signature.

While the package fails to provide any additional direct relief to state or local governments, it does extend the deadline for using unspent funds from the Coronavirus Relief Fund to December 31, 2021. The deal does not provide additional flexibility for the use of those funds. The package also fails to increase the federal cost share for the Federal Emergency Management Agency (FEMA) Public Assistance grants to 100 percent. Instead, the package provides FEMA up to $2 billion in assistance through states for families with funeral expenses due to COVID through December 31, 2020. It requires FEMA to provide this assistance and waives an otherwise required 25% state match.

Despite the failure on the part of Congress to provide much-needed aid to struggling communities, the bill does contain some potential bright spots for businesses and residents in need. The final package includes aid for struggling households, in the form of an additional round of $600 stimulus payments, a $300 unemployment insurance supplement through March 14, 2021, and extensions to the Pandemic Unemployment Assistance program for self-employed or gig workers and the Pandemic Emergency Unemployment Compensation program, which covers unemployment for workers who exhaust state benefits.

Other top-line totals in the relief package include:

  • $25 billion for rental assistance,
  • $325 billion in small business aid ($284 billion of which is another round of modified PPP loans, along with $20 billion in Economic Injury Disaster Loan Advance Program funding and $15 billion to support closed performance and entertainment venues),
  • $45 billion for transportation, including $14 billion in additional transit support, $10B in additional surface transportation block grant funding, as well as $2 billion additional for primary and general aviation airports,
  • $54.3 billion for public K-12 schools, $10 billion for childcare (funding the Child Care & Development Block Grant and Head Start),
  • $13 billion for the Supplemental Nutrition Assistance Program,
  • $7 billion for broadband ($3.2 billion of which is dedicated to a low-income broadband emergency subsidy for households, and another $300 million for rural broadband), and
  • $4.25 billion to provide increased mental health and substance abuse services and support, including $1.65 billion for the Substance Abuse and Prevention Treatment Block Grant.

In addition to COVID aid, the legislative package includes funding for federal programs mostly at level, or slightly increased funding, from FY2020 through the end of September 2021. This includes number of policies and programs were reauthorized that are important to communities across Michigan including the Water Resources Development Act.

Another positive development, the Great Lakes Restoration Initiative Act, which provides funding for the protection of the Great Lakes, was reauthorizes and expanded. It was set to expire at the end of FY 2021 but was reauthorized for another five years. The bill increases the current authorization level from $300 million to $375 million in FY 2022 and increases funding by $25 million per year until it reaches $475 million in FY 2026.

After the COVID assistance and federal funding package is passed into law, the League will continue to advocate for cities and their residents to access as many of these resources as possible. While some programs, such as the stimulus payments, are expected to move quickly, others will require a brief rulemaking process or additional guidance from federal agencies before they can reach communities, families, and businesses. We will also continue to pursue direct aid for state and local governments. We have already had some initial discussions on this topic, and we anticipate it will be a priority for the new Administration when they take office in late January.

John LaMacchia is the Assistant Director of State and Federal Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

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