Las Vegas, Nev. – U.S. Senator Catherine Cortez Masto (D-Nev.) joined U.S. Senators Elizabeth Warren (D-Mass.) and Chris Van Hollen (D-Md.) in a letter to Federal Reserve (Fed) Chairman Jerome Powell and Department of Treasury (Treasury) Secretary Steve Mnuchin urging that they provide greater financial assistance to state and local governments in the current economic downturn. The letter notes the importance of aggressive Fed and Treasury efforts to help cash-strapped state and local governments, especially given the impact of service reductions on communities of color, while acknowledging that Congress must also provide the fiscal support that is needed to strengthen these governments in the long-term.
“Communities of color are already bearing the economic burden of this pandemic, and if state and local governments are forced to let go of workers who have been temporarily laid off, that burden will be exacerbated unnecessarily, amplifying existing racial inequalities,” the senators wrote. “We therefore urge you to use all available tools at your disposal to prevent the irreversible damage that could occur if state and local governments are required to cut spending and services, fire furloughed employees, and permanently eliminate public sector jobs – all outcomes that would permanently worsen existing economic inequality.”
Congress provided Treasury with a $454 billion bailout fund in the Coronavirus Aid, Relief and Economic Security (CARES) Act to support lending to eligible businesses, States, or municipalities. Treasury and the Fed have set aside $35 billion of this funding to establish the Municipal Liquidity Facility (MLF) to provide loans for state and local governments, but the MLF to date has been vastly underutilized, showing that the current terms of the facility are insufficient. The senators called on Treasury and the Fed to expand the MLF and make its terms better for state and local borrowers.
A full copy of the letter can be found HERE.