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U.S. Business Leaders Call on Senate to Help States, Cities and Towns

California Governor Gavin Newsom holds a meeting with members of the Task Force on Business & Jobs Recovery. (Photo credit: Office of the Governor of California)
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The chorus of voices calling for federal help to states, cities and towns amid the coronavirus pandemic keeps getting louder. The question is how long the Senate, led by Sen. Mitch McConnell of Kentucky, can afford to ignore it.

Nearly 100 business leaders, labor leaders and government officials from across the country wrote to congressional leaders this week asking them to do more to help states, cities and towns facing huge budget shortfalls as a result of the economic downturn caused by the pandemic.

The California Governor’s Task Force on Business and Jobs Recovery – which includes top executives and representatives of business giants such as Disney, Google’s parent company Alphabet, Apple, Netflix and Salesforce – said public services provided by states, cities and towns are crucial to the economic recovery and will suffer further cuts unless the federal government acts.

“State, local and tribal governments are critical to our recovery,” the letter reads, adding a few lines down that, “Without additional assistance from the federal government, the very programs that will help people get back to their lives and get back to work – from childcare to job training to small business support – will all be forced up on the chopping block.”

In the letter, members of the task force – which includes union leaders such as AFSCME President Lee Saunders – self-identified as “non-political leaders from different sectors of the economy.” They made it clear that the way out of this crisis is for lawmakers to rise above political partisanship and provide $1 trillion in assistance to states, cities and towns, a similar amount as contained in the House-approved HEROES Act.

“We stand with business leaders throughout the nation, from both sides of the aisle, who have respectfully and urgently requested that Congress direct $1 trillion in direct and flexible relief to states, tribes and local governments,” the letter reads. “It will protect core government services like public health, public safety, public education and help people get back to work. This funding will help our states and cities – and America’s economy – come out of this crisis stronger and more resilient.”

How bad the economic crisis could get is made starkly clear in an analysis from the Economic Policy Institute (EPI).

Explaining that state and local governments are nearly all constrained in their ability to borrow money to meet expenses, including public services, the EPI analysis said that failure by Congress and the president to help states, cities and towns would undoubtedly lead to a depression.

“The incredibly steep recession we’re currently in is guaranteed to torpedo state and local governments’ ability to collect revenues,” wrote Josh Bivens, EPI’s director of research. “The result will be intense pressure for large cutbacks in public spending by state and local governments in coming years. Such cutbacks would be absolutely devastating to the cause of restarting the economy and allowing people to find jobs, even if the virus has completely abated.”

Appropriate action by the federal government to help states, cities and towns would “create or save roughly 5-6 million jobs by the end of 2021,” EPI estimates. Without such action, “a prolonged depression is guaranteed.”

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