Congress Scrambles to Negotiate Final Annual Spending Agreement & Additional COVID Deal
(December 18, 2020) – As of press time, Congress was scrambling to complete negotiations on its final Fiscal Year 2021 (FY21) appropriations package and reach agreement on more federal COVID-19 relief.
Congress has relied on “Continuing Resolutions” to extend current funding levels until finalizing its FY21 deal, the latest of which expires tonight. But with details still being hammered out behind closed doors, Congress will likely need to work through this coming weekend to finalize its deal. Top-line numbers have long been agreed to, including largely level overall funding for U.S. EPA, so NACWA expects EPA and water programs in particular – like the SRFs and WIFIA – to receive funding that is on par with the FY20 numbers.
At the same time as the FY21 budget is being finalized, a new COVID-19 package aimed at keeping a recession at bay and providing some relief for small businesses, the unemployed and more going into the holidays is also being negotiated down to the wire. To be passed, this COVID-19 package will need to be bundled in conjunction with the final FY21 deal. After months of stalemate, talks on another package suddenly progressed in December, facilitated by a thawing of previous hard lines by Congressional leadership – which was encouraged by both President Trump and President-elect Biden.
Additional CARES funding for local, county and state governments has been excluded from the latest negotiations, as has direct relief for the water sector. The package focuses heavily on immediate relief for struggling households and businesses, including assistance for tenants to pay outstanding rent and utility bills, all of which indirectly helps water revenues but provides no direct relief for the sector or municipalities.
NACWA staff will continue to monitor whether there will be any extensions related to existing CARES funds (currently facing a Dec. 30 expenditure deadline) and any changes in the tenor of negotiations. Should Congress pass this slimmed down deal for 2020, we anticipate they will return to significant pressure to augment state and municipal assistance and provide infrastructure-oriented stimulus in early 2021.
While final details of the FY21 funding package and COVID-19 relief bill are still being hammered out, we expect both to be passed by Congress this weekend or early next week. Congress will then adjourn for the holidays, returning to Washington the week of January 4 to start its new session.