The U.S. Senate returns to Washington next week for what is scheduled to be a three-week period leading up to a six-week August-September recess, and Majority Leader Mitch McConnell (R-KY) is expected to unveil his party’s version of the next round of coronavirus-related relief aid next week.

Congress has enacted at least $2.2 trillion in coronavirus-related relief to date (we don’t yet have a score on the PPP extension bill enacted July 8). The House passed the Democratic offer for the next round of COVID aid on May 15 – the Heroes Act, coming in at a jaw-dropping $3.4 trillion. Word is that McConnell is determined to keep the total cost of his bill under $1 trillion.

The only items that we are certain are going to be in the McConnell bill are:

• Legal liability protections for businesses and local governments that reopen.
• A large amount of cash for schools (and possibly colleges as well) – but only if they reopen for in-person instruction this fall. This is rumored to be around $75 billion.
• An extension of the special COVID unemployment insurance benefits, but probably at a lower level than the current $600 extra per week above the normal UI rates.

President Trump is once again pushing for an expensive payroll tax cut to be part of the legislation, and there are a host of other GOP proposals (a back-to-work cash bonus, numerous tax cuts and credits) floating around.

But the GOP is still reluctant to address the top priority of Democrats – financial aid to state and local governments to help them deal with the sudden collapse of tax revenues, and the increase in operating costs, associated with coronavirus and its lockdowns.

The central question of aid to state and local governments then spreads over and complicates proposals for various kinds of transportation aid. All state departments of transportation are part of state government, and almost all mass transit agencies and airport authorities are also subsets of state or local government (or cooperative ventures between multiple municipal governments, like the Port Authority of NY/NJ or the Metropolitan Washington Airports Authority).

H.R. 748, the CARES Act (enacted March 27) contained $112 billion for state governments, and the House-passed Heroes Act would add another $500 million billion. If any additional aid is provided, should Congress micromanage that aid and tell state governments how much to give to their transportation departments, versus how much to give to their education departments, correction departments, public assistance departments, etc? Or should Congress let state governments decide?

On the local government front, immediate aid directly to mass transit agencies and airport sponsors was deemed necessary in March because the per-passenger revenues that provide much of those agencies and authorities with operating revenues collapsed with the first lockdowns in mid-March. Congress deemed it necessary to give those types of municipal government agencies immediate aid to tide them over ($25 billion for transit, $10 billion for airports) until a more comprehensive response could be found. But the CARES Act did not provide any money for state DOTs because they were not, yet, feeling the financial hit.

The House-passed Heroes Act would provide an additional $15.75 billion for transit agencies – but only in the 14 most populous metro areas, leaving the rest of the country (including relatively transit-dependent cities like Portland and Baltimore) high and dry (see summary here). (The national mass transit lobby (APTA) had for $24 billion, and that has since grown to somewhere in the $32-36 billion range as of this week.)

And the House bill would also provide $15 billion in supplemental federal-aid highway funding – but it would give out that money via the highway spending formula, not based on highway revenue losses, which ensures that Alaska and D.C. will get up to ten times as much money, relative to the amount of revenue they are losing, than states like Delaware or Maine (see analysis here).

While the Heroes Act did not propose any additional Amtrak funding, the passenger railroad has since come back and asked for an additional $1.5 billion, which will also be on Democratic priority lists.

Congress is on a tight timetable. Even though the Senate is going to be in session for three weeks (until August 7), the House calendar only has them coming back through July 31, which is coincidentally the day that the special coronavirus unemployment insurance expires. Earlier this month, Congress passed (and the President signed) a bill extending the PPP loan program through August 8, so Congress might have to pass a separate one-week unemployment extension while they negotiate the larger bill.