State, local coronavirus aid fight may hinge on school funds

Both parties say schools need more money if they are to safely reopen, and the aid would also help state, local finances

Sen. Roy Blunt, R-Mo., talks with reporters on his way to the Senate Republican luncheon  June 30, 2020. (Caroline Brehman/CQ Roll Call file photo)
Sen. Roy Blunt, R-Mo., talks with reporters on his way to the Senate Republican luncheon June 30, 2020. (Caroline Brehman/CQ Roll Call file photo)
Posted July 16, 2020 at 6:03pm

Republican lawmakers may be more open to additional funding for state and local governments in the next coronavirus relief package — if they can say it was set aside for schools.

Education funding is shaping up to be a big component of the next federal aid package, with both parties saying schools will need more resources for things like personal protective equipment and cleaning supplies if they are going to safely reopen in the next few months.

That bipartisan priority could provide grounds for a truce of sorts in the dispute over aid to state and local governments. Republicans have resisted additional aid, saying they don’t want to bail out states that were poorly managed even before the COVID-19 pandemic.

On Friday, Senate Minority Leader Charles E. Schumer will make another push for the $1 trillion in state and local aid they want in a news conference with the American Federation of State, County and Municipal Employees.

Democrats have started arguing that much of the $1 trillion will end up being funneled to school systems, which account for a large portion of state and local budgets.

Republicans are not committing to that amount, but have suggested they would back state and local funding that is earmarked for that purpose.

"If we give a lot of money to education, that's after Medicaid, that is the biggest expense for most state governments now," Sen. Roy Blunt, R-Mo., a senior appropriator, told reporters Thursday. "And if you give a lot of money to education, you have probably filled a lot of the gap that was created by their loss in revenue."

But some Republicans, including President Donald Trump, want to condition any federal aid for education on schools reopening, a prerequisite Democrats are saying is a nonstarter.

"What does the president do? The negative: 'We’re not going to give you money unless you open up,'" Speaker Nancy Pelosi said at her weekly news conference Thursday. "No, you give schools money to open up. And that is precisely what we do in the HEROES Act."

The California Democrat was referring to the nearly $3.5 trillion coronavirus relief package that the House passed in May. In addition to the nearly $1 trillion for state and local governments in that package, the measure includes a $100 billion stabilization fund specifically designated to help schools with reopening costs.

“We probably will need more money,” Pelosi said, noting the needs have grown since Democrats initially came up with the $100 billion figure.

Child care funding

The push for education funding comes as Democrats try to up the ante on pandemic aid demands as they await a Republican proposal that Senate Majority Leader Mitch McConnell is expected to unveil next week.

Senate Democrats unveiled a proposal Thursday that would offer $350 billion in child care, job training, health care and more for minority communities. Part of the cost would be offset by reclaiming about $200 billion that had been provided to the Treasury to support Federal Reserve lending to distressed businesses.

"If we are serious about lifting up communities of color that have faced generations of inequalities, it starts by putting our money where our mouth is and passing this bill," Senate Minority Whip Richard J. Durbin said in a statement.

In the House, meanwhile, Democrats plan to bring to the floor next week two bills providing new child care funding that could serve as bargaining chips on the broader aid package. “This is very, very important and a very high priority for us,” Pelosi said.

One bill would provide $50 billion in grants to child care providers during and after the pandemic — the same amount included in the broader Senate Democratic measure aimed at minorities. A second bill would provide $10 billion in child care infrastructure grants, along with $850 million in family care grants for essential workers and several expanded tax breaks for child care expenses.

But the fine print of legislative details, even on areas of bipartisan common ground, could prove vexing once the real bargaining begins.

Both parties say they back $1.2 billion in emergency funding for the U.S. Citizenship and Immigration Services, which needs the cash infusion to avoid furloughing about 13,000 workers. The agency has suffered from a drop in fee revenues because of the pandemic.

In a letter to top Senate leaders and appropriators, Democrats led by Sen. Jeff Merkley of Oregon insisted that the aid be conditioned on "sideboards" so that the agency can't transfer funds to immigration enforcement, for instance.

Squeezing all the competing priorities from both parties into a compromise package is sure to prove a heavy lift, since McConnell has set an overall cost target of roughly $1 trillion — or less than a third the size of what House Democrats have been seeking. “Hopefully we’ll be able to stay close to that,” Blunt said.

Still, there appeared to be some common priorities that could easily become part of a new aid package. Blunt, for example, said he was supportive of new child care funding. “It’s hard to get people back to work if the number one challenge for working families — particularly single parents — is how to put your kids somewhere that’s safe,” he said.

Blunt also said he was working with Sen. Amy Klobuchar, D-Minn., on a proposal to roll back the 20 percent state matching requirement on federal election security funding.

[Democrats push to cut federal strings on state election grants]

Jobless benefits

But several other issues continued to divide the parties, including on how to extend relief for jobless workers when an expanded federal benefit of $600 a week expires at the end of this month. While Democrats have pushed to extend that benefit, Republicans have complained many workers receive more in benefits than they earn on the job.

"We're not going to take away unemployment benefits,” said Larry Kudlow, Trump’s top economic adviser. “I think what we'll do is put a more prudent cap on them, at perhaps 70, 75 percent of wage, so you create incentives to work, not disincentives.”

Pelosi stopped short of insisting on the $600 benefit, saying the benefit amount needed would depend in part on the size of tax rebate checks that may be part of a new aid package. But she also chastised Republicans for trying to reduce the jobless benefit.

“When they’re giving away all this big money and they worry about $600 for families who need it so desperately, it just makes you wonder: Who are they here for?” Pelosi asked.

[Negotiators seem open to trade-offs for coronavirus relief deal]

Kudlow also said the administration is “looking at a reemployment bonus of some kind” to aid the unemployed, but Pelosi appeared to dismiss the idea. “I don’t know if they know what they’re talking about, so I can’t really thoughtfully address what you just asked,” she told reporters.

And the two parties remained divided over whether and how to provide any liability protection to employers who reopen their businesses — a top priority for McConnell. Pelosi said Democrats would fight to retain worker rights under the Occupational Safety and Health Administration.

“That is absolutely essential for us to have to protect our workers at all times but an even stronger one at the time of coronavirus,” Pelosi said. “So they know what they have to do.”

Jennifer Shutt contributed to this report.