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Rhode Island leaders hailed a $2-trillion coronavirus economic rescue package senators reached agreement on in Washington early Wednesday morning, although questions remain about how much relief it will provide for the state’s looming budget problems.
The package, which was still being finalized late Wednesday with a Senate vote pending, includes an expansion of unemployment insurance benefits, assistance to struggling businesses and aid to hospitals and direct payments to households.
Rhode Island Democratic Sen. Jack Reed, part of a 20-senator bipartisan working group that hashed out the deal in talks since last week, said the plan includes a $150-billion State Stabilization Fund with a minimum $1.25 billion going to each state.
The agreement directs the U.S. Treasury secretary to send the funds to Gov. Gina Raimondo within 30 days of stimulus legislation being enacted, according to Reed’s office.
However, the money can only be spent on “expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019” and “were not accounted for in the budget most recently approved as of the date of enactment of this section for the State or government.”
“This is not a complete blank check, it has to be used responsibly for its intended purpose, which is to save the state from fiscal crisis as it battles a health crisis,” Reed press secretary Chip Unruh told The Journal. “There is no doubt these funds will be put to good use by Governor Raimondo, and the Senator expects the state and Treasury to work cooperatively.”
Although the state government is seeing new expenses related directly to the coronavirus health emergency, more immediate challenges are being caused by the plunge in state revenue resulting from the closure of many businesses.
The General Assembly’s top Democratic leaders are slated to meet Thursday in a first-of-its-kind emergency meeting to authorize up to $300 million in borrowing to prevent the state running out of cash.
House Speaker Nicholas Mattiello Wednesday welcomed the federal help for families and small businesses in an email, but said “it is uncertain how these funds specifically impact state finances.”
Raimondo, who has been in close contact with Reed about federal aid for weeks, in her daily news conference said Wednesday was “a good day in our fight against coronavirus” because of the Senate agreement.
However, she said her administration is still “working through the details.”
We are in the midst of a mushrooming crisis that requires an immediate and massive federal response. I was able to include a $150B State Stabilization Fund in the Emergency #Coronavirus Economic Rescue Agreement that will direct $1.25 billion in economic help for Rhode Island.
— Senator Jack Reed (@SenJackReed) March 25, 2020
Regardless of how much it helps the state budget, the federal stimulus package should provide a significant injection of money into households suffering since the economy nearly ground to a halt.
The bipartisan budget deal includes direct $1,200 payments to most American adults with incomes up to $75,000. Families will receive $500 per child. The size of the payments decrease for individuals with incomes above $75,000 per year and those making more than $99,000 (based on 2018 tax filings) won’t receive a payment.
Assuming the proposal is passed by Congress, the checks are likely to go out to households next month, Reed said in a news release.
The deal would also:
Expand unemployment insurance benefits by $600 per week for four months, on top of states’ base unemployment rate.
Create a $500-billion fund managed by the U.S. Treasury to aid struggling businesses through loans and loan guarantees. Democrats added “stricter oversight and restrictions, stronger worker protections, and an inspector general to help oversee the fund” to the deal, according to Reed’s news release.
Provide $367 billion for small businesses including $10 billion to the Small Business Administration for emergency grants up to $10,000.
Provide $130 billion, according to U.S. Rep. David Cicilline, in funding for hospitals fighting the coronavirus.
Establish new federal funding for “transit, housing infrastructure, economic development, and education, including public libraries,” according to Reed’s news release.
In a phone interview Wednesday, Reed described the stimulus negotiations as an historic moment in American history, and an unprecedented one: As senators met in a committee hearing room to hash things out, they maintained several feet of distance, or in some cases telephoned in.
There were few staffers and as he walked the halls Reed would “see nobody,” he said.
His experience as a young Army officer came in handy: Because food options were limited, he had to bring in his own meals from home to reheat.
“I am a master of the microwave,” Reed said.
Reed said he found Treasury Secretary Steven Mnuchin, the main negotiating party from the White House, reasonable.
Among the issues Reed brought up directly with Mnuchin: stopping bailout money from going to foreign-based cruise ship companies. Time will tell if the restrictions take hold, Reed said.
“We tried awfully hard to make sure that this was restricted to American companies, and there is some language in there,” he said.
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