Congressional leaders are said to be closing in on a coronavirus relief package that would reportedly extend direct stimulus payments to most Americans, while denying federal aid to states and localities that New York leaders say is desperately needed to survive the coming months.
The roughly $900 billion deal could be finalized as soon as Wednesday afternoon, according to some members of Congress. It would include a $300 weekly boost to federal unemployment benefits through the end of March, along with a one-time direct payment to most Americans, estimated at $600, the Associated Press reported.
In its final form, the long-awaited rescue package is expected to largely resemble bipartisan legislation proposed by "moderate" Senators Mitt Romney and Joe Manchin earlier this month, with two key exceptions: the deal will reportedly exclude Republican-sought liability insurance for businesses, as well as the roughly $160 billion in state and local aid that Democrats considered a priority.
On Wednesday, Governor Andrew Cuomo attacked the Republican Senate leadership for what he described as a "hyper-political parochialism" of blocking aid to New York and other states battered by the pandemic.
"You want to bankrupt New York now in the middle of this pandemic, when the number are spiking, when we're just about to start this ambitious vaccination program?" Cuomo said. "It's madness."
As a result of the pandemic, the state is currently projecting a $15 billion revenue gap, which is likely to worsen amid expected lockdowns wrought by the surge in new infections and hospitalizations. The second wave of the virus has similarly slowed the economic recovery across the country, contributing to plummeting consumer activity and a resurgence in unemployment claims.
"It’s just unfathomable that [Senator Mitch McConnell] doesn’t recognize that it’s not just blue states that are suffering," said James Parrott, the director of economic and fiscal policies at the Center for New York City Affairs at the New School. "The consequences of not including fiscal relief are dire."
The exclusion could mean layoffs to municipal workforces, cuts to social service programs, and, if additional aid is not allocated by April of next year, a massive rollback in state education spending.
"It’s not a 'trickle down,' it’s more like a tidal wave of damage to organizations and people who depend on the state," said John Kaehny, the executive director of Reinvent Albany.
Economists predict that much of the worst impact would fall on providers of homeless services and other nonprofits that rely on state payments. Under Cuomo's executive order, the state has been withholding 20 percent of most local payments since June.
The MTA, which is facing the grimmest prospects of any entity in New York, still expects to receive an estimated $4.5 billion in federal funds to balance their 2021 budget — though the transit agency remains at least $8 billion in the hole. On Wednesday, the MTA board held off on approving drastic service cuts and fare hikes. But transit officials warned that such actions may still be necessary if funding does not come by January.
It's also unclear if the new deal would extend the Pandemic Unemployment Assistance, which covers roughly 600,000 freelancers, gig workers, and self-employed NYC residents.
In a tweet, Mayor Bill de Blasio said that the direct payments were a "step in the right direction, but any deal without economic aid to the local governments leading this fight fails to meet the moment."
Cuomo predicted that additional federal funding could come under President Joe Biden, though that would likely not happen until late February or March. The scope of that aid may depend on the results of run-off elections in Georgia, which could determine control of the Senate.
In the meantime, advocates said the looming deal would likely bring about painful decisions for both the state and city.
"It's just terrible news for New York," said Kaehny. "The time between now and the next bailout is going to be tough and miserable."
