Federal Stimulus Package Negotiations Stall as Unemployment Benefits Run Out

August 3, 2020

The Senate GOP proposal, known as the HEALS Act, did not include additional aid to cities.

Members of the U.S. Senate left Washington, D.C., on July 31, as negotiations on a fourth stimulus package broke down and enhanced Federal Pandemic Unemployment Compensation program benefits to Americans across the country dried up.

The Health, Economic Assistance, Liability Protection and Schools (HEALS) Act would have partially extended the enhanced unemployment benefits. A last-ditch effort by Senate Republicans to advance the bill failed to garner Democrats’ support, leaving all sides to go back to the drawing board and resume negotiations. Perhaps of most concern to cities is the lack of agreement between parties on additional aid to cities.

No additional funds for cities

While the Senate Republican proposal includes some additional flexibility for Coronavirus Relief Fund eligible expenditures, it does not include any additional aid to local governments. The flexibility to use already appropriated federal funds for lost revenue is critical, but the lack of additional funding to cities facing an unprecedented budget crisis threatens to exacerbate the economic downturn and prolong the recovery time.

Two weeks ago, as the Senate returned from the July recess, League of Minnesota Cities (LMC) staff reached out to the legislative directors for both Sen. Tina Smith and Sen. Amy Klobuchar, urging continued support for direct aid to Minnesota cities of all sizes. Both senators have indicated support for additional funding for states and local units of government in the past, and Sen. Smith’s office responded affirmatively to our most recent communication.

Contact your members of Congress

In partnership with the National League of Cities (NLC), LMC encourages members to reach out to their representatives and senators in Washington, D.C. Members can do so by submitting a message through the NLC Cities Are Essential campaign site or contacting congressional staff directly.

It is critical that Congress pass an additional stimulus package that includes direct, flexible funding to each and every local government regardless of size. LMC echoes NLC’s request to provide $500 billion over the next two or more years—$125 billion per year—to municipalities through a fair and appropriate allocation methodology.

For information on how to contact your members of Congress, contact Daniel Lightfoot, LMC, at dlightfoot@lmc.org or (651) 281-1295.

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