U.S. Senator Bob Menendez (D-NJ) is leading a bipartisan request to the U.S. Department of Treasury and the Federal Reserve asking them to ease borrowing costs for state and local governments that are ailing due to the COVID-19 pandemic.
“State and local governments are on the frontlines in the fight against COVID-19. These entities are quickly deploying desperately-needed funds to hospitals, public health departments, nursing homes, water and power utilities, public transit, and other essential services,” U.S. Sens. Thom Tillis (R-NC), Sherrod Brown (D-Ohio), Lisa Murkowski (R-AL), and Menendez wrote to Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell.
“ … To enhance state and local governments’ continued ability to finance the delivery of key public services for the COVID-19 health emergency and rebuild our economy, the Treasury and Federal Reserve must also ensure sufficient access to medium- and long-term capital for state and local governments.”
Section 4003 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act enables Treasury and the Federal Reserve to design a program that can support all types of issuers and credits.
Establishing such a facility would ensure state and local governments across the country can meet their financing needs as they respond to the health crisis and lay the foundation for future economic growth.
Menendez has proposed both the Municipal Bonds Emergency Relief Act and the $500 billion State and Municipal Aid for Recovery and Transition (SMART) Fund, which has been well received in New Jersey thus far, though it remains to be seen if it has the Republican support to clear the full Senate.