Rush to next round of COVID-19 financial aid? Not so fast, says Grassley

Congress will approve a Phase 4 coronavirus relief package, U.S. Sen. Chuck Grassley predicted Wednesday, but not until it evaluates how well the first three phases are working.

Democratic House Speaker Nancy Pelosi has proposed a $3 trillion coronavirus relief package that includes another round of cash payments to individuals, $1 trillion for states and cities and 'hazard pay” for essential workers.

More federal relief may be necessary, but Grassley, the Iowa Republican chairman of the Senate Finance Committee, said it's too soon to know how much is needed and where.

State and local governments have asked for help, and Grassley said Congress likely will look at how to help with the loss of sales, fuel and hotel-motel tax revenues, for example.

'We've been two months in this, so there's lost revenue,” he told reporters. Rather than make that decision now, Grassley thinks it would be better to wait until state and local governments have more data on how those revenue losses will affect their budgets.

Pelosi, he suggested, is 'just taking figures out of a clear blue sky.”

'I think we need a rational basis,” Grassley said, so he would like to wait until more information after a few weeks before making a decision.

In Iowa, state revenues are running behind collections from a year ago. The Legislative Services Agency daily receipts showed personal and corporate income tax each running more than 6 percent less than last year. Sales taxes are 7 percent above a year ago. Overall, net receipts are 1.45 percent less than this time last year.

Local governments also are feeling the impact of the economy being shut down. Cedar Rapids City Council member Tyler Olson said earlier this month the city expected a $45 million near-term drop in revenue.

'That kind of hit makes it difficult to keep things going,” he said, noting the long-term impact is unknown.

Congress went into the coronavirus pandemic with its eyes open, Grassley said.

'We hoped that this CARES Act would be enough and that we didn't need to do more,” Grassley said. 'But if we had to do more, then we'd be right back here in June or July doing more.”

Although Pelosi has indicated the Democratic-controlled House could approve her Phase 4 package this week, Republican Senate Majority Leader Mitch McConnell has indicated he doesn't want to act before Memorial Day.

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