Topline: As the coronavirus continues to take a toll on the economy, state governors have now ramped up their calls for additional federal funding to deal with the pandemic, after top Republicans indicated that they would block efforts to add such funding to the latest U.S. relief bill.

  • The top two Republicans in Congress, Senate Majority Leader Mitch McConnell (R-Ky.) and House of Representatives Leader Kevin McCarthy (R-Ca.), pledged not to negotiate with Democrats on the most recently proposed $250 billion bill to aid small businesses.
  • The new piece of legislation is slated to add more funds to the Paycheck Protection Program (PPP), which was originally funded with $350 billion from the massive $2.3 trillion coronavirus rescue bill, or CARES Act, approved by Congress late last month.
  • While Democrats support the increased aid to small businesses, they have also been pushing for new additions to the $250 billion bill, including more funding to state and local governments that have been on the frontlines of dealing with the coronavirus crisis.
  • The latest move from Republicans came even as the National Governors Association on Saturday issued a bipartisan call for Congress to address the fiscal toll the coronavirus is taking on states. 
  • Governors Larry Hogan of Maryland and Andrew Cuomo of New York, who serve as chairman and vice-chair of the association, both called for an additional $500 billion in federal funding to state and local governments, warning that widespread business shutdowns and stay-at-home orders have already “resulted in catastrophic damage to state economies.”
  • Both governors also criticized the recently passed $2.3 trillion fiscal stimulus bill, which they said should be amended to allow states to use federal funding not only for coronavirus-related expenses but also to offset their large shortfalls in revenue.

Crucial quotes: “Governors are crying out for help and Congress must act,” House Speaker Nancy Pelosi (D-Ca.) said in support on Twitter. “Our state and local governments are in crisis, and between emergency expenses and rising unemployment sapping revenue, they need an immediate infusion of funds to prevent the collapse of essential services.”

“In the absence of unrestricted fiscal support of at least $500 billion from the federal government, states will have to confront the prospect of significant reductions to critically important services all across this country, hampering public health, the economic recovery, and — in turn — our collective effort to get people back to work,” Hogan and Cuomo said in their joint statement on Saturday.

Tangent: In his own daily press conferences, New York Governor Andrew Cuomo has regularly spoken about the need for new federal legislation to help cover states’ budgetary shortfalls. “The federal stimulus bill is going to be key,” Cuomo said Saturday. “That legislation, in my opinion, has to be better than the past legislation—has to be less political, less pork barrel and more targeted to the actual purpose” of helping hard-hit states like his. Earlier this week, he said New York’s state budget has been “decimated” by the ongoing public health crisis. To restart the economy, he urged the federal government to “remedy the previous inequities” of the CARES Act, which provided nowhere near enough aid to his state. Cuomo called it “woefully inadequate” from New York’s point of view; “It was not fair to New York and that has to be remedied in any legislation that goes forward,” he said.

Key background: Earlier, Senate Minority Leader Chuck Schumer (D-Ny.), said on Friday that he and Treasury Secretary Steven Mnuchin were organizing bipartisan talks on the $250 billion bill next week, in the hopes of resolving the stalemate in Congress. Senate Republicans failed to pass a vote on the legislation last Thursday; While they support the new small business aid, Democrats are hoping to negotiate for broader funding, with more money going to hospitals, community banks and local governments.

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