Happy Tuesday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL—Cash-strapped cities hammered by COVID-19 beg for federal help: City and county governments across the country face the looming prospect of major budget holes as they confront both massive expenses combatting the coronavirus and sharp declines in revenue caused by lost jobs and tumbling consumer confidence.
Estimates vary, but experts analyzing local government budgets expect the cumulative revenue losses to total in the hundreds of billions of dollars. And if transmission of the virus continues at its new and torrid pace, the cliff could become even steeper.
City officials and budget experts say the federal government must step up to fill the gaps or states will face a catastrophe.
- “We’re going to face significant decreases in revenues over the next two to three years,” said James Mueller (D), the mayor of South Bend, Ind. “We’re starting to have some direction on the budget for 2021 and beyond. The big wildcard is will Congress step up and help cities and states fill the hole.”
- “We’re still waiting for the federal government to provide some level of financial support,” said Bryan Barnett (R), the mayor of Rochester Hills, Mich. “I know when a government needs help, and my local government needs help, it needs support. It needs something that I can’t provide it, which is additional funds.”
The Hill’s Reid Wilson explains here.
LEADING THE DAY
Trump signs bill imposing sanctions on China over Hong Kong: President Trump said Tuesday that he has signed legislation that would impose mandatory sanctions on businesses and individuals that assist China in restricting Hong Kong’s autonomy.
Trump also said that he signed an executive order declaring the United States would treat Hong Kong the same as mainland China. The president said he took the actions to “hold China accountable for its oppressive actions against the people of Hong Kong.”
- The legislation mandates sanctions on entities that violate China’s obligations to Hong Kong and also sanctions banks doing business with those entities.
- The text of the executive order described by Trump has not been released by the White House. Trump said in May that he had directed his administration to begin rolling back policy exemptions offering Hong Kong a special status.
- Trump said that Hong Kong would no longer be granted special privileges or special economic treatment and that the U.S. would restrict its access to exports of sensitive technologies.
The Hill’s Morgan Chalfant explains here.
White House campaign advocates new ‘pathways’ to jobs amid pandemic: A White House campaign released Tuesday is advocating for new “pathways” to jobs as the coronavirus pandemic has left many Americans out of work.
- The campaign, entitled “Find Something New,” encourages Americans who are unemployed or unhappy in their jobs or careers to seek out new opportunities.
- The effort is led by the White House American Workforce Policy Advisory Board, co-chaired by Ivanka Trump and Commerce Secretary Wilbur Ross.
- Apple, IBM and members of the Business Roundtable also assisted in developing the campaign.
The Hill’s Justine Coleman has more here.
GOOD TO KNOW
- Stocks rallied on Tuesday, even as COVID-19 deaths and infections continued to climb.
- The House Appropriations Committee on Tuesday advanced a funding bill with a slew of police reforms that are unlikely to make it through the GOP-controlled Senate.
- Former Federal Reserve Chairs Ben Bernanke and Janet Yellen will testify before lawmakers on the federal government’s response to the coronavirus-driven economic downturn, a House subcommittee announced Tuesday.
- More than 8 in 10 small-business owners who got coronavirus relief loans through the Paycheck Protection Program (PPP) say they will run out of funding by the first week of August, according to a Goldman Sachs survey released Tuesday.
- More than a dozen companies that have filed for bankruptcy during the pandemic have committed to paying millions in bonuses to their executives as many Americans are jobless, Bloomberg News reported.
- The Treasury Department has cancelled some coronavirus relief payments sent to deceased individuals, the IRS said.