Senate Republicans rejected a proposal from Sen. John Kennedy last week to give state and local governments more flexibility when it comes to spending federal dollars from the coronavirus rescue package. But the White House may be more receptive.
A handful of GOP senators met with President Donald Trump and his senior aides at the White House on Tuesday to discuss the coronavirus aid, and Kennedy said when he described his legislation, he “got a very positive reception.”
“I asked the chief and the president and Jared Kushner on a call over the weekend to talk about coming over and pitching my bill,” Kennedy told reporters after the meeting. “We pitched the bill, we talked at length about the merits of it.”
Under Kennedy’s proposal, states and local governments could use the $150 billion allocated in the CARES Act for operating expenses that are not directly linked to the coronavirus. The money would not be able to go toward a state’s pension fund — an area of concern for many Republicans.
“If a municipality has a utility system, supplies electricity — people can't pay for electricity right now — the municipality is not going to cut off our people. But on the other hand, they've got to pay for electricity,” Kennedy explained. “So they want cash flow.”
A senior administration official confirmed the White House is “quite interested” in the bill.
Kennedy added that he asked the president to speak with Senate Majority Leader Mitch McConnell (R-Ky.) about the idea and expects to hear back from the White House about additional details in the next day or so.
In addition to Trump, the meeting included Treasury Secretary Steven Mnuchin, White House chief of staff Mark Meadows, White House press secretary Kayleigh McEnany and senior adviser and son-in-law Jared Kushner.
GOP Sens. Tim Scott of South Carolina, Marsha Blackburn of Tennessee, Cory Gardner of Colorado, John Boozman of Arkansas and Dan Sullivan of Alaska also attended.
“It was a productive meeting. We made at least progress or baby steps towards having a resolution that creates more flexibility,” Scott said. “For me, as important as progress on the topic of the underlying issue is having guardrails.”
Senate Republicans have been divided over how to approach delivering relief to state and local governments, with some expressing concern about the rising national deficit and the money getting misused.
House Democrats are pushing hard for more assistance, unveiling a new rescue package Tuesday that includes $875 billion for cash for state and local governments.
Sen. Lindsey Graham (R-S.C.) urged Tuesday for "an audit" of how the money in the CARES Act package is being spent, citing news reports that the Alabama Legislature plans to use some of the money for a new Statehouse.
"I think that's going on all over the country," Graham said. "I think it'd behoove us all to kind of do an audit of what Phase Three looks like."