SMART Act

Floor Speech

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Mr. CASSIDY. Madam President, I thank Senator Menendez and return the compliment. We have worked through a lot of issues to find a bill that meets a valid, public purpose that can pass on a bipartisan basis in both Chambers. I thank Senator Menendez for working with me on that.

The title of this bill is the ``SMART Act,'' but in retrospect, I wish we had renamed it ``the Thin Blue Line Act'' because this is about helping cities and States preserve essential services such as police, fire, and education for the reopening of our economy.

Let's just kind of review. The Federal Government asked that State and local governments shut down their economy in order to control the coronavirus, and just like those small businesses closed at the behest of the government authority, so did State and local governments close, if you will, at the behest of the Federal authority. But what that did is it devastated the tax basis.

Moody's, which Senator Menendez already alluded to, the independent agency that looks at the finances of cities and States, has said that if your State is dependent upon income tax, upon sales tax, upon tourism, and upon proceeds from energy, you have been hammered. Your tax base has fallen dramatically, and with the dramatic fall of that tax base comes a dramatic fall in the ability to support the thin blue line--the educators, the firefighters, the you name it, the essential services that are essential to the reopening of our economy when we come out the backside of this epidemic.

Now, it has already happened. Moody's predicts that 3 million of these essential workers will be laid off. I am told that 1 million already have been. You can read about universities laying people off, but let's go back to the thin blue line.

The city of Shreveport, LA, just put out a budget in which there is a $20 million hit to their city budget overall, and $3.9 million was, unfortunately, laid upon law enforcement and 54 positions eliminated.

Now, I am told that some Federal dollars came through and allowed the restoration of some of those positions, which, if you will, is a proof in concept that if there is help from the Federal taxpayer to the State and local taxpayer--because they are one in the same--then, these essential services can be preserved. And we know that if those police positions are preserved, then, that downtown in Shreveport is more likely to safely reopen for commerce.

Now, we talked about Moody's predicting loss of revenue. Louisiana is predicted to lose 45 percent of its revenue, but there are other States affected. New Jersey, Maine, Florida, Oklahoma, Michigan, Idaho, Alaska, Arizona, and Illinois are all predicted to lose large sums of tax revenue.

So let me speak specifically about the SMART Act, or, again, as I call it, the ``Thin Blue Line'' bill. It is a reasonable, bipartisan, ``this is how we go forward'' bill in both Chambers. We picked $500 billion. Some would say: Well, that is too much. Actually, that was the amount of money that Moody's predicts State and local governments will lack over the next year and a half. So we actually kind of nail where the independent agency puts the need for our State and our local government, and it is targeted.

One, there has been a lot of concern that this would be used to ``bail out States,'' that those who have accumulated a large, unfunded accrued liability in their pension funds would use that money to support those pension funds. We specifically do not allow that. So if that is somebody's political concern, that has been addressed.

What do we do? Well, first, a third of the dollars can go out now because it is based upon population. This recognizes that if California has 31 million people and Wyoming has 500,000, there needs to be some accommodation for just the population size because, inevitably, that is going to influence the total need.

The next third will go out at the end of June, based upon how hard a State was hit in terms of health from the coronavirus. So if your State was slammed from coronavirus--Louisiana was, New Jersey was, and other States have been--then, that is where you get the help.

Frankly, it is unfortunate that you are getting the help. It would be a lot better if your State had not been impacted, but if it has been impacted, it is there to support your State through the health aspect of this crisis.

The last third will go out at end of this calendar year. That is based upon the financial hit that your State has taken. So if your State's tax base has been decreased by 45 percent, then, you would get additional dollars in the third tranche of money, which comes out at the end of the calendar year. Obviously, at the end of this calendar year is almost beyond the fiscal year for most States, and so that would place the dollars at the State's disposal for the next fiscal year. In that way, we cover this prolonged period that Moody's says that State and local governments will be out.

There is one more concern, and that is whether or not all this money will go to a Governor's office and none will go to counties or parishes or municipalities in Louisiana. One-third of the dollars will go directly to municipalities and counties--those local governments that are on the forefront of providing services to those who are being affected by the coronavirus epidemic.

We think we have something which balances the needs of stakeholders-- the most important stakeholder being the American citizen--that both addresses the need for fiscal accountability and the need to preserve those essential government services to get our economy going once more.

Again, I am going to ask all of my colleagues to support the ``Thin Blue Line'' bill, otherwise known as the SMART Act. I think it is a smart way to go forward to make sure we don't slip into a recession, but we return with as robust an economy from this crisis as when we entered the crisis.

With that, I will yield to my colleague from Maine.

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