Urban states get ahead, rural states get less on Biden’s COVID-19 relief bill By Reuters

Mnuchin of the US Treasury is considering changes to aid for national security companies

2/2 © Reuters. FILE PHOTO: Vermont Coronavirus Disease (COVID-19) Outbreak 2/2

By Andy Sullivan and Jason Lange WASHINGTON (Reuters) – The $ 1.9 trillion COVID-19 aid package now making its way through the US Congress would provide $ 350 billion to help state governments and locals affected by the pandemic to balance their budgets, more than double the amount of legislators. approved last year. But not all states get ahead: Democrat-led urban states like Connecticut, New York and Massachusetts that took drastic measures to stop the spread of the coronavirus would get roughly three times more money per person than in the package approved at the start of the health crisis in March. Republican-led rural states, including Wyoming, North Dakota and South Dakota, which did less, would see less cash. This is because Congress is giving more importance to poverty and unemployment this time, as it considers how to distribute money to keep police, firefighters and other public employees on the job during a pandemic that has killed more. than 500,000 Americans and has put millions out of work. It also reflects the fact that the Democrats who control both houses of Congress drafted the package for fellow Democratic President Joe Biden without the involvement of Republicans. Under the new bill, dubbed the American Rescue Plan, 61% of aid would end up in states that voted for Biden in November, up from 56% in the bipartisan CARES Act passed last March. Reuters examined the House Oversight Committee’s projections for how much direct tax help each state would receive on the bill, which will be put to a vote in the House of Representatives this week before going to the Senate. It is expected to pass, even if no Republican votes for it. The CARES Act distributed $ 140 billion to state and local governments based on population, delivering a minimum of $ 1.25 billion to each state. That gave the highest per capita benefits to the states with the smallest populations, including Wyoming and Vermont. Another $ 3 billion was set aside for Washington, DC, and the US Territories This time, Democrats have lowered the state minimum to $ 500 million. The remaining $ 300 billion would be allocated based on unemployment and poverty levels, as well as population. Tribal governments and territories would receive $ 24.5 billion. Washington, DC would be treated as a state. Advocates say the new formula ensures money goes where it’s needed, as the cost of COVID-19 has been uneven across the country. Unemployment in December topped 9% in Nevada and Hawaii, which depend on tourism, tripling the 3% in Nebraska and South Dakota. “This is a more specific approach,” said Michael Leachman, a budget expert with the left-leaning Center for Budget and Policy Priorities, which supports additional state and local aid. Republicans say the bill modifies states that have imposed fewer coronavirus-related restrictions. “The real reason for this bill is to send billions to bail out the governors of blue states and reward their damaging lockdown policies,” Rep. Jason Smith of Missouri said at a House Budget Committee hearing Monday. . The new bill would direct about $ 800 per person to Republican-led Utah and Alabama, which had some of the least restrictive COVID-19 responses, according to researchers at the University of Oxford. It would send roughly $ 1,200 per person to Democratic-led Massachusetts and New York, among the most restrictive. Democrats argue that the money should go to the areas that have suffered the most. “Since when is unemployment not a legitimate indicator of economic problems?” Rep. David Price, a Democrat from North Carolina, said at the same hearing. A DIVISIVE ISSUE State and local aid have proven to be one of the most divisive aspects of Washington’s multi-billion dollar effort last year to fight the virus and keep the world’s largest economy afloat. Both Republicans and Democrats widely supported small business loans and direct payments to families. But Republicans have refused to give more help to state and local governments. State and local aid were excluded from a bipartisan $ 900 billion bill that passed in December. The National Association of State Budget Officials estimated that state revenues would fall 10.8% in the current fiscal year compared to pre-pandemic estimates, affecting both Republican-led and Democratic-led states. . Some analysts say the Democrats’ proposal, which totals about $ 500 billion when spending on public schools, transportation and other aid is included, provides states with more than they need. “People drastically overestimated how bad state and local finances would be,” said Stan Veuger, a center-right economist at the American Enterprise Institute. Bipartisan groups like the National Governors Association have argued that more help is needed to help states provide health care and education and prevent further layoffs that could prolong the recovery, though they have not endorsed specific proposals. Although the new bill would allocate more money to large states, smaller states are still doing well. Vermont, Wyoming, Alaska and North Dakota, each with less than 1 million residents, are still among the top 10 beneficiaries per capita.