U.S. senators propose $500 billion rescue for state, local governments

WASHINGTON (Reuters) – A U.S. Senate Republican and a Democrat proposed a $500 billion rescue package for state and municipal governments on Monday, as it became increasingly clear that the next coronavirus relief bill will not include money for reeling local authorities.

“The current bill coming out will not have this aid, or any aid, for states and municipalities. It kind of makes sense, though, because we don’t yet know what the toll is,” Republican Senator Bill Cassidy said on a conference call with journalists.

Cassidy, of Louisiana, and New Jersey Democrat Bob Menendez, who represent two of the states hit hardest by the pandemic, said their bill would allocate money based on states’ populations, infection rates and revenue losses in order to ensure that money goes where it is needed most.

The two senators discussed their proposed legislation as Democrats and Republicans worked on details of a possible $450 billion-plus deal to provide more aid to small businesses and hospitals hurt by the coronavirus pandemic.

State governors and local officials across the United States have been pleading for more federal aid to provide essential services, as Americans stay home and businesses have closed because of the coronavirus outbreak.

Congressional leaders said they could vote on the latest bill, which would follow a $2.3 trillion aid package passed in March, as soon as this week.

Cassidy and Menendez said they hoped their bipartisan bill could provide a framework for what they dubbed “Covid 4,” a subsequent tranche of coronavirus aid. COVID-19 is the name of the illness caused by the coronavirus.

“Covid 3.5 (the current bill) is more focused on business and hospitals, primary, and testing,” Menendez said. “We think this is well poised for what I believe will be a Covid 4.”