Trump, McConnell insist no state, local government funds in imminent coronavirus rescue package

Congressional and White House negotiators were working late Sunday night to finalize a fourth coronavirus rescue package, with a goal of getting it approved by Congress on Wednesday. The package, currently worth about $470 billion, is focused on adding $310 billion to the tapped-out Paycheck Protection Program, bank-issued government loans aimed at keeping small businesses afloat and staffed. Democrats also won $75 billion for hospitals and $25 billion for testing, and there is another $60 billion for another drained emergency lending program for small businesses.

The bailout package will not include $150 billion for state and local governments, another Democratic priority, Treasury Secretary Steven Mnuchin and Senate Majority Leader Mitch McConnell (R-Ky.) told Senate Republicans on Sunday afternoon, Senate GOP aides told Politico and Axios. McConnell noted the deal has not yet been finalized.

"The thinking among some Trump administration officials is that many states should be reopening their governments soon and that additional funding could deter them from doing so," reports Axios' Alayna Treene. Politico adds: "The White House and Trump administration have been holding out because, in part, they believe if Congress keeps cutting checks for state and local governments, they will be disincentivized to open up their economies."

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States and cities have taken steep hits to their budgets from the coronavirus outbreak. "It's important for the feds to support our efforts to fund the stuff we do," Massachusetts Gov. Charlie Baker (R-Mass.) said on CBS News. "If we're laying off tens of thousands of people at exactly the time when they want to reopen the economy, we're going to be swimming against the current they're trying to create." Trump said Sunday evening he supports backstopping states and local governments at "another time." White House officials tell Axios they envision such a package weeks or months from now.

The White House reiterated Sunday on Twitter that, as far as they see it, "the success of the phased approach will rely on preparedness and planning by states — safe and efficient screening, sufficient PPE supplies, and the ability to mitigate any rebound."