Prominent Democrats press Fed, Treasury to aid states, citing racial
inequality
Send a link to a friend
[July 14, 2020]
(Reuters) - With the
Republican-controlled U.S. Congress far from agreement on how or even
whether to give more aid to states and cities reeling from revenue
losses during the coronavirus crisis, three U.S. Senate Democrats are
appealing to the U.S. Treasury and the Federal Reserve to do more to
help.
Citing the particularly sharp impact that cuts to government jobs and
services would have on Black Americans, senators Elizabeth Warren, Chris
Van Hollen and Catherine Cortez Masto called on Treasury Secretary
Steven Mnuchin and Fed Chair Jerome Powell to ease the terms of the
Fed's lending facility for state and local governments to allow more to
tap it.
So far only one state, Illinois, has borrowed from the facility,
launched in May as one of nearly a dozen Fed programs aimed at nursing
hard-hit segments of the financial markets and the economy during the
crisis.
Lockdowns, high unemployment, and a drop in consumer confidence has
decimated household spending and reduced states' revenue from sales and
other taxes, forcing many to lay off staff, trim services, and plan for
more cuts in the coming year.
![](http://archives.lincolndailynews.com/2020/Jul/14/images/ads/current/cca_laptop-sda021709.png)
"Communities of color are already bearing the economic burden of this
pandemic," the senators wrote in a letter dated July 10, a copy of which
was provided to Reuters.
"Failing to provide necessary aid to state and local governments not
only threatens the stability of communities across the country, it would
also have a disproportionate impact on women, Black, and Hispanic
workers, who are overrepresented in public sector jobs."
[to top of second column]
|
![](../images/071420PICS/news_f11.jpg)
Democratic 2020 U.S. presidential candidate Senator Elizabeth Warren
speaks to supporters in Monterey Park, California, U.S., March 2,
2020. REUTERS/Kyle Grillot
![](../images/ads/current/fitzpatrick_lda_SPONSOR_2017.png)
Data from many states shows that Blacks and Hispanics are more
likely to get COVID-19, and to die from it, than their white
counterparts.
They have also been harder hit economically, with unemployment among
African Americans at 15.4% and among Hispanic workers at 14.5% in
June, compared with 10.1% among whites.
Among their demands: to give city and state borrowers more time for
repayment and to reduce the interest rate "to at least match the
generosity you have provided through the facilities that lend to
businesses that are of even poorer credit quality than the municipal
borrowers," they wrote.
The facility should also allow smaller cities to tap it if needed,
the senators said.
"To be clear, these solutions are not a substitute for Congress
stepping up to provide the needed aid," they wrote. Fed policymakers
have repeatedly urged Congress to do so.
(Reporting by Ann Saphir; Editing by Kim Coghill)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
![](http://archives.lincolndailynews.com/2020/Jul/14/images/ads/current/charrons_bch041713.png) |