Chamber Backs Some State Aid as Republicans Urge Wait-and-See

(Bloomberg) -- The U.S. Chamber of Commerce is backing some aid to state and local governments as part of Washington’s next step in responding to economic devastation wrought by the coronavirus pandemic.

The call by the powerful business lobbying group, which has historically been allied with the GOP, contrasts with resistance from congressional Republicans, who fear more aid could delay reopenings. They want to wait and see how states and local governments use the funds that lawmakers have already appropriated.

“There is an important role for targeted and temporary assistance to state and local governments,” Neil Bradley, the group’s chief policy officer, told reporters on Thursday. At the same time, he pushed back on Democratic plans to give state and local governments more than $1 trillion.

The differences between Republicans and Democrats “are not insurmountable,” Bradley said, adding that the chamber is hoping to see a bill passed by July 4th.

Bradley argued that the unforeseen costs of fighting the virus and the shock to tax revenue caused by lockdowns could imperil state budgets and the jobs they support, citing workers repairing highways or parents who are dependent on school reopenings to go back to work themselves.

“Letting this linger halfway through the summer really risks the opportunity that we have to provide support for the economy,” Bradley added. “It’s important that we get it right, but there is a sense of urgency.”

Other Priorities

The group also outlined other priorities for a fourth round of stimulus, which could take shape in the weeks after next week’s Memorial Day holiday.

Senate Republican leader Mitch McConnell has been criticized for suggesting bankruptcy as an option for states facing coronavirus expenses and revenue losses. He has since said he’s open to providing some aid so long as it doesn’t cover pension liabilities and other shortfalls he sees as the result of “past mistakes.” But he’s facing little pressure from his rank-and-file members as they argue that Americans have to return to business.

Bradley dismissed the House Democrats’ bill as not “being driven by the numbers and the data.” He claimed that half of states would receive at least as much as their whole general fund revenue for 2020 under the plan, and urged Congress to instead “focus on meeting the needs that truly exist.”

Bradley said he’d discussed the idea with members of both parties, but wasn’t sure that anyone had committed to the chamber’s approach.

Business Protections

The group’s top issue continues to be its call for protections for businesses from lawsuits related to the virus because of employee claims of exposure, shareholder concerns with handling the crisis or issues with products and health care. The chamber is aligned on the liability issue with McConnell, who has said that he won’t agree to state aid without changes to liability that Democrats and labor groups have resisted.

Bradley also reiterated that he’d like to see ongoing aid for businesses such as restaurants and events venues that will face increased difficulty reopening because of occupancy limits or social distancing requirements and could continue to suffer economically for months.

Those could resemble more targeted versions of current relief for small businesses or tax credits for employee retention, Bradley said.

“Congress has taken unprecedented steps to build bridges for many businesses,” he said. “What we don’t want to see is a bridge that abruptly stops halfway across.”

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