Sens. Menendez, Cassidy Announce $500 Billion Stabilization Fund

Sen. Bob Menendez unveiled a bipartisan agreement to deliver federal resources to states and communities on the frontline of the coronavirus pandemic. The fund will encompass $500 billion.

The State and Municipal Aid for Recovery and Transition (SMART) Fund will expand upon the existing $150 billion set aside in the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help both local governments and states.

Co-sponsors Sens. Menendez and Bill Cassidy (R-La) previously worked together to reform the country’s disaster response and the National Flood Insurance Program. The senators said the country’s response to COVID-19 would need to mimic its response to natural disasters.

Smaller Municipalities

Eligibility in the program was expanded to include counties and towns with populations of 50,000 or more, significantly down from the 500,000 population threshold currently in place.

The funding would ensure eligible entities receive money to plug revenue losses due to the outbreak. It would target additional funding towards hotzones that are combating the pandemic head-on.

“The COVID-19 pandemic may not know state borders, but it has certainly hit some states and regions harder than others,” said Sen. Menendez. “The proverbial house is on fire and we need to focus the water on the hotspots, because if we don’t put the flames out, they will only jump until the entire block is up in smoke.”

Aligning with Governors’ Calls

The SMART Fund, the only bipartisan proposal in the U.S. Senate as of April 19, was in-line with requests from the National Governors Association. The funding would be used to expand testing and contract tracing while providing resources to residents, hospitals, small businesses, and schools.

“This fund will provide us with a critical resource during this unprecedented time and prevent draconian budget cuts that would negatively impact our state’s fiscal stability and ability to meet the needs of New Jersey’s nine million residents,” said Gov. Phil Murphy.

Three equal tranches would be utilized to ensure areas in the greatest need receive funding. A third of funding would be delivered to eligible entities base on population size; a third to entities based upon number of COVID-19 cases related to the U.S. population; and one-third to entities based upon state revenue losses relative to pre-pandemic projections.

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