Stimulus Check: The debate over state and local aid
Yahoo Finance's Jessica Smith breaks down the debate over state and local aid as lawmakers remain divided over stimulus.
Video Transcript
ZACK GUZMAN: I also want to shift over here. As we're talking about the election, let's not forget that the stimulus bill still hangs in the wings here, as we try and see what's going to happen on that front.
For months-- I don't need to remind you-- lawmakers were going back and forth and failed to agree on a relief package. But they couldn't get past their differences, specifically when it came to funding for states as well. I want to bring back on Yahoo Finance's Jessica Smith with another look at where that debate might go here after the election. Jess?
JESSICA SMITH: Yeah, Zack, state and local aid was really a problem in these negotiations from the very beginning. We heard so much from lawmakers about giving more money to state and local governments. So I wanted to hear what local leaders were seeing on the ground and talk to some senators about why lawmakers just could not work this out. Let's watch.
NANCY PELOSI: Honor our heroes, state and local.
JESSICA SMITH: It's been a common refrain in Washington over the last six months.
NANCY PELOSI: State and local government are heroes.
JESSICA SMITH: And it's been a major stumbling block in stimulus negotiations. As Washington bickers over giving states and municipalities more money to help weather the pandemic, local leaders say they're already feeling the pain.
JOE BUSCAINO: We're laying off essential employees, canceling job-creating private sector infrastructure projects. So this is real.
JESSICA SMITH: Joe Buscaino, president of the National League of Cities and a Los Angeles City council member, warns, without more aid, more educators, first responders, healthcare workers, sanitation workers, and others around the country could lose their jobs.
Senator Bob Menendez says Congress cannot let that happen.
BOB MENENDEZ: It would be the height of irony that those who helped us get through the pandemic and would help us again if a second wave materializes are the ones who would be laid off on the unemployment line, instead of on the frontline, helping us defeat the virus.
JESSICA SMITH: Democrats like Menendez have been pushing for more money to help state and local governments stay afloat. Republicans and the president have fought against what they see as a political effort to save states and cities that budgeted badly.
DONALD TRUMP: But she wants to bail out poorly-run Democrat states, and that's a problem.
JESSICA SMITH: But it's not just blue states that are struggling. With record unemployment in travel and tourism at a standstill, states across the country saw their tax revenue plunge, all while the cost of fighting the virus added up.