US Senate Reconvenes on 4 May, Leader McConnell Foresees Further Aid for States, Cities

US Senate Republican leader Mitch McConnell (KY) Monday predicted that Congress would approve further funding for states and cities whose budgets have been hit hard by the coronavirus chaos.

There probably will be another state and local funding bill but we need to make sure that we achieve something that will go beyond simply sending out money,” Senator McConnell said.

He said a suggestion he made last week that states could enter bankruptcy was just “an option to be looked at.”

The suggestion was criticized by leaders on both sides of the aisle.

And again Monday, President Trump questioned why the federal government should bail out “poorly run,” largely Democrat-led states.

The Federal Reserve on Monday announced it was expanding its program to buy bonds directly from states and cities to include more local communities.

In a news release Monday, the Fed said it would now purchase bonds from counties with a population of at least 500,000 residents and US cities of at least 250,000 residents.

That is a lower threshold than the initial proposal announced in early April. The 1st plan was limited to cities with 1-M residents and counties with at least 2-M residents.

The Fed also extended the termination date of the facility to the end of the year, instead of 30 September, in order to provide issuers more flexibility.

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