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December 22, 2020.  Last weekend, House and Senate leaders reached agreement on an omnibus deal to fund the federal government and provide a new round of COVID-19 relief – absent direct aid to local governments. The package is expected to pass both the House and Senate this week, although another short-term continuing resolution may be required to keep the federal government funded and allow the bill time to work through procedural steps.

The package fails to provide any direct relief to state or local governments, although it does extend the deadline for using unspent funds from the Coronavirus Relief Fund to December 31, 2021. The deal does not provide additional flexibility for the use of those funds. The package also fails to increase the federal cost share for the Federal Emergency Management Agency (FEMA) Public Assistance grants to 100 percent. Instead, the package provides FEMA up to $2 billion in assistance through states for families with funeral expenses due to COVID through December 31, 2020. It requires FEMA to provide this assistance and waives an otherwise required 25% state match.

The final package includes aid for struggling households, in the form of an additional round of $600 stimulus payments, a $300 unemployment insurance supplement through March 14, 2021, and extensions to the Pandemic Unemployment Assistance program for self-employed or gig workers and the Pandemic Emergency Unemployment Compensation program, which covers unemployment for workers who exhaust state benefits.

Other top-line totals in the relief package include:

  • $25 billion for rental assistance,
  • $325 billion in small business aid ($284 billion of which is another round of modified PPP loans, along with $20 billion in Economic Injury Disaster Loan Advance Program funding and $15 billion to support closed performance and entertainment venues),
  • $45 billion for transportation, including $14 billion in additional transit support, $10B in additional surface transportation block grant funding that can be used directly by communities above 200,000 and across the state, as well as $2 billion additional for primary and general aviation airports,
  • $54.3 billion for public K-12 schools, $10 billion for childcare (funding the Child Care & Development Block Grant and Head Start),
  • $13 billion for the Supplemental Nutrition Assistance Program, 
  • $7 billion for broadband ($3.2 billion of which is dedicated to a low-income broadband emergency subsidy for households, and another $300 million for rural broadband), and
  • • $4.25 billion to provide increased mental health and substance abuse services and support, including $1.65 billion for the Substance Abuse and Prevention Treatment Block Grant.

In addition to COVID aid, the "Christmas tree" legislative package includes funding for federal programs mostly at level or slightly increased funding from FY2020 through the end of September 2021 and a number of policy reauthorizations and actions important to cities, including the Water Resources Development Act, the Don't Break Up the T-Band Act, energy provisions, and tax extenders.