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McConnell under mounting GOP pressure to boost state aid

Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellBoebert communications director resigns amid Capitol riot: report Urgency mounts for new voting rights bill Senate Democrats leery of nixing filibuster MORE (R-Ky.) is facing growing calls within his own conference to increase financial assistance to state and local governments, something the GOP leader shut down during recent coronavirus relief talks with Democrats.

Support for more state aid is coming from Republican Sens. Mitt RomneyWillard (Mitt) Mitt RomneyImpeachment trial tests Trump's grip on Senate GOP 'Almost Heaven, West Virginia' — Joe Manchin and a 50-50 Senate The Hill's Morning Report - Biden asks Congress to expand largest relief response in U.S. history MORE (Utah), Susan CollinsSusan Margaret CollinsImpeachment trial tests Trump's grip on Senate GOP 'Almost Heaven, West Virginia' — Joe Manchin and a 50-50 Senate McConnell about to school Trump on political power for the last time MORE (Maine), Bill CassidyBill CassidyMcConnell about to school Trump on political power for the last time Senator releases photos of man wanted in connection with Capitol riot Electoral College fight splits GOP as opposition grows to election challenge MORE (La.), John KennedyJohn Neely KennedyMORE (La.), Lisa MurkowskiLisa Ann MurkowskiImpeachment trial tests Trump's grip on Senate GOP 'Almost Heaven, West Virginia' — Joe Manchin and a 50-50 Senate The Hill's Morning Report - Biden asks Congress to expand largest relief response in U.S. history MORE (Alaska), Dan SullivanDaniel Scott SullivanMcConnell about to school Trump on political power for the last time Senate poised to override Trump's defense bill veto OVERNIGHT ENERGY: Trump administration proceeds with rollback of bird protections despite objections | Trump banking proposal on fossil fuels sparks backlash from libertarians | EU 2019 greenhouse gas emissions down 24 percent MORE (Alaska) and Shelley Moore CapitoShelley Wellons Moore CapitoMcConnell about to school Trump on political power for the last time GOP senator: Trump rhetoric on election fraud 'certainly not helpful' in Georgia Senate GOP opposition grows to objecting to Electoral College results MORE (W.Va.). 

The boldest push has come from Cassidy, who teamed up with Sen. Bob MenendezRobert (Bob) MenendezYear-end deal creates American Latino, women's history museums Lawmakers call for including creation of Latino, women's history museums in year-end spending deal Trump offered 0 million to terrorism victims to save Sudan-Israel deal  MORE (D-N.J.) to propose a $500 billion fund that would “make sure state and local governments can maintain essential services.”

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Sullivan and Kennedy are pushing more modest plans giving states greater flexibility to spend money already provided by the federal government to cover general revenue shortfalls.

Those proposals are running up against McConnell’s opposition to more funding. 

The Kentucky Republican last month said “this whole business of additional assistance for state and local governments needs to be thoroughly evaluated,” which his office later characterized as “stopping blue state bailouts” for states such as California, Illinois and New York. 

But his GOP colleagues are now joining calls for more federal aid to states, arguing their red states also face dire fiscal challenges caused by the deadly pandemic.

Romney walked into a Republican lunch on Tuesday with an oversized chart headlined: “Blue states aren’t the only ones who are getting screwed.”

The graphic illustrated how states with Republican governors, places like Missouri and Florida, are grappling with severe revenue shortfalls. 

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Emerging from a GOP lunch meeting Wednesday, Romney told reporters, “We’re discussing state circumstances.” 

“Different states are in different positions, and we’re looking at those realities,” he added.

McConnell has responded to colleagues by pointing out that a Treasury–Federal Reserve lending facility with more than $4 trillion in loan-backstopping power has broadened its focus to include municipalities, according to a senator familiar with the internal debate.

But critics like Collins say smaller local governments aren’t being helped by the Treasury-Fed loan program.

On Wednesday, Collins said she is talking to Cassidy about legislation to increase aid to states and is fighting for a provision to ensure rural states are treated fairly.

“I have made suggestions that we avoid the [Senate Democratic Leader Charles] Schumer-type provision that was included in the first tranche of state aid that discriminated against rural states,” she said, arguing the $2.2 trillion CARES Act “created a Treasury loan facility that was only available to entities, communities, or counties or boroughs with populations of 500,000 or more.”

Collins faces a competitive reelection bid this year in a state that’s projected to lose $200 million in revenue by the end of June and as much as $1 billion by the middle of 2021, according to Moody’s Analytics.

McConnell, responding to calls for “additional legislation” on Tuesday, said “we are not ruling that out.”

“But we think we’re going to take a pause here, do a good job of evaluating what we’ve already done,” he said, speaking for Republican colleagues.

He noted that guidance from the Treasury Department “provides some flexibility on the state and local front where we’ve already allocated $150 billion.”

The GOP proposals with the most momentum would give state and local governments flexibility to use $150 billion in stabilization funding passed by Congress in March to cover budget shortfalls.

Sullivan introduced the Coronavirus Relief Fund Flexibility Act that would allow federal funds to replace state and local revenue shortfalls sustained between March 1 and Dec. 31.

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That measure is co-sponsored by Capito, Murkowski, Sen. Kevin CramerKevin John CramerImpeachment trial tests Trump's grip on Senate GOP McConnell about to school Trump on political power for the last time Regulator finalizes rule forcing banks to serve oil, gun companies MORE (R-N.D.), Sen. Angus KingAngus KingSenate Democrats leery of nixing filibuster 'Almost Heaven, West Virginia' — Joe Manchin and a 50-50 Senate Bipartisan group of senators: The election is over MORE (I-Maine) and Sen. Sheldon WhitehouseSheldon WhitehouseDemocrats seize on GOP donor fallout Senior Democrat says Hawley, Cruz should step down from Judiciary Hawley, Cruz face rising anger, possible censure MORE (D-R.I.).

The CARES Act, which was signed into law March 27, limits federal help to state and local governments to cover expenditures incurred due to the public health emergency and were not accounted for in budgets approved before the end of March.

Murkowski said her state has seen a significant shortfall in revenue because of a major drop-off in tourism.

Cruise line operators, who were hit early on this year with fast-spreading infections, have halted their popular tours of the Alaska coastline. Murkowski noted that 58 percent of tourists visit Alaska via cruise ships. 

“We all recognize that extraordinary resources have been directed to the states but in many cases — mine is a perfect example — it’s going to be difficult to spend that all on COVID-related [priorities] if there isn’t some way to allow communities to have some level of offset for lost revenue,” she said.

Murkowski pointed to Denali Borough, home to Denali National Park and Preserve, where she said tourism dollars have dried up.

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“Their economy is tourism. During the summertime that’s when they make all their money and they make it from bed tax,” she said. “That borough that gets 80 percent of its revenues from bed tax doesn’t have the means to increase taxes on 1,800 people.” 

Senate Republican Whip John ThuneJohn Randolph ThuneImpeachment trial tests Trump's grip on Senate GOP For platform regulation Congress should use a European cheat sheet Streamlining the process of prior authorization for medical and surgical procedures MORE (S.D.) said Wednesday there is a vocal group of Republican senators advocating for more state assistance but noted that a large number of GOP lawmakers remain opposed.

“There’s some sympathy for the plight of state and local governments,” Thune said.

“Most of our members, I think, would prefer allowing some additional flexibilities for the dollars that have already been appropriated versus a big new infusion of cash,” he said. “We’re batting it around. There’s some really strong views on the other side of that.” 

“We’ll continue to discuss it and see where we come down,” he added. 

Cramer said that while he supports Sullivan’s bill to give state and local governments more flexibility to spend federal assistance, he doesn’t yet support sending out another tranche of aid. 

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“What we’ve done to this point is a lot when you consider the Medicaid expansion, the education dollars, the $150 billion [state stabilization fund]. That represents over a quarter of all of the states’ entire revenue that they collect in a year,” he said.

A Senate Republican aide said President TrumpDonald TrumpFacebook temporarily bans ads for weapons accessories following Capitol riots Sasse, in fiery op-ed, says QAnon is destroying GOP Section 230 worked after the insurrection, but not before: How to regulate social media MORE could determine whether a critical number of Republicans line up behind another tranche for federal relief for state and local budgets.

"I get the sense there are probably a number of other members willing to go along with that," the aide said. "The wildcard is obviously Trump. He's shown no interest in being tight-fisted on spending matters. If you give him whatever wants, he'll write the check and then all those Republicans will go along with it because Trump supports it."

Sen. Rand PaulRandal (Rand) Howard PaulMcConnell about to school Trump on political power for the last time Legislatures boost security after insurrection, FBI warnings Former Missouri senator says backing Hawley was 'worst mistake of my life' MORE (R-Ky.), an outspoken fiscal conservative, said the federal deficit has grown too big to give any more money to states.

“There really isn't any money to send anyone. I mean, there is no rainy-day fund, there is no savings, we'd have to borrow it,” he said. “A lot of the money we currently borrow is from China, so we'd have to be more indebted to China in order to send more money to states.”