On Monday, Democrats in the House of Representatives unveiled a scaled-back $2.2 trillion coronavirus relief package, a last-ditch effort to strike a bipartisan deal before the election. The updated HEROES Act, $1.2 trillion less than the original bill passed by the House in May, includes $436 billion in emergency aid for state and local governments, an additional round of $1,200 stimulus checks for most Americans, and money to restore $600 expanded unemployment payments through January and funding to shore up the census and the U.S. Postal Service.

On Wednesday, House Speaker Nancy Pelosi (D- San Francisco) and Treasury Secretary Steven Mnuchin met for the first time in nearly two months as they attempted to reach an agreement ahead of the General Election. The House was expected to vote on a $2.2 trillion proposal on Wednesday night, but only hours beforehand, Democratic leadership scrapped the plans as Speaker Pelosi and Secretary Mnuchin attempted to craft a deal. The obstacles remain the same ones that derailed talks several weeks ago: 1) the size and scope of any package; and 2) funding for state and local governments, which Democrats are adamant about including and most Republicans remain skeptical.

In the updated HEROES Act, States would receive $238 billion based on a state’s share of unemployed workers. Local governments would receive $179 billion, evenly divided between municipalities and counties:

  • $89.5 billion to municipalities using a modified CDBG formula:
    • $62.65 billion for entitlement municipalities (generally defined as those with populations of at least 50,000).
    • $26.85 billion for non-entitlement municipalities (generally defined as those with populations of less than 50,000). These funds will be awarded to states, which must make awards to non-entitlement cities based solely on population within 30 days of receipt.
  • $89.5 billion to counties based on population.

Additionally, the bill expands the use of CARES Act funds, originally distributed in March, to cover lost, delayed, or decreased revenue stemming from the COVID public health emergency and extends the date of expenditure for CARES funds to December 31, 2021.

Also, despite significant pushback from Republican lawmakers who criticized the inclusion of language to address the financial services needs of the cannabis industry, the text of the Secure and Fair Enforcement (SAFE) Banking Act was again inserted into the updated HEROES Act. The previous and much larger version of the HEROES Act which was approved in May contained the SAFE proposal. Republicans had previously insisted that SAFE Bankings’ inclusion was merely part of an expansive Democratic wish list of items not related to the health crisis.

Late Thursday night, negotiations between the Trump Administration and House Democrats collapsed; subsequently, House Democrats proceeded with a vote on their new proposal. The measure narrowly passed the House as there were no Republicans supporting the package and a handful of Democrats failed to support it. It remains doubtful that an agreement to provide additional aid can be reached in both Houses of the Congress prior to the election.

The text of revised version of The Heroes Act is here. A one-pager on the legislation is here. A section-by-section summary is here. Additional information on the state and local relief provisions is here.