The governors of new mexico, kansas and guam as well as douglas holtzeakin, former director of the Congressional Budget Office. This virtual hearing is just over four hours. The committee will come to order. Authorized to declare recess of the committee at any time. Before we begin todays hearing, i want to remind you of a few matters including some regulation accompanying House Resolution 965. I would ask all members to keep themselves on me was. This will minimize disturbances not being recognized with background noise they made only again one at a time. If you are participating today please remain with us during the hearing t that she recommends vendors identify themselves and facilitate the chairs recognition. I would also ask members to be patient this hearing is entitled the need for Financial Aid to americas states and territories during the pandemic. I now recognize myself for four minutes to give an Opening Statement of the 189,000 people have lost their lives to the virus last week showed the rate is still over 10 are black, hispanic and asian workers and millions of families for the nationstate and territories during this crisis it would have been interesting to hear the republican governors at todays hearings. Unfortunately they opted not to advise any. Nevertheless i look forward to hearing from governors kelly and faults. The navigates the pandemic. After all state and territory governments on the front lines of the crisis. Many states such as personal protective equipment and other critical medical supplies and ensure a Robust Public Health response to the crisis. The. Of the state houses approved and unanticipated expenditures to combat the virus. Experiencing the decline in revenue in the Congressional Budget Office shows the total budget shortfall will near 1 trillion. The budget cuts are not the solution to the shortfalls in fact the cuts in spending exacerbated as a result of this crisis, Financial Support for the First Responders and while Congress Passes 150 billion in state aid into the care act. The National Governors association represents republicans and democratic governors for much more help. Recognizing the urgent need to provide additional covid19 relief and passed the act on may 15 which was 118 days ago among other things the legislation would provide to the state and local territories to create Emergency Assistance to the heroes act would provide significantly more funding and also would clarify the treasury guidance from using the relief funds. Mitch mcconnell and Senate Republicans have blocked and attheir alternative does provida 0 to the states and a zero forr rental assistance and to add insult to injury hundreds of billions of dollars that could be used to support in addition the president himself has made reference. Because he doesnt like to protest in the communities they must stop playing games and pass the relief in the act. About the challenges they are facing and the response that is needed from the government. Now i recognize the Ranking Member of the committee the gentleman from North Carolina. I think the chairwoman for yielding and here we are again. Having a hearing about a bill the house passed four months ago with no chance of becoming a l law. Its being used to prioritize communities that are not going to become law and if the chairwoman wanted to governors to attend she could have given us more than one witness that is provided for. The witness today will be able to speak to the Economic Issues facing the State Governments and the relative positions those governmentsat are in. If you want to appropriate money to the state, there is an Appropriations Committee. We are the Financial Service committee within our jurisdiction you have muchneeded lending that is being given to states through the Municipal Bond market hadgh federall reserve. That is lending not spending. And so, what i think we need is a reasonable compromise to support workers, Small Businesses and make sure we can get people back on their feet again and make sure they have a better healthcare response and testing regime back in the spring we had a great compromise inbl the act. We provided 2. 6 trillion in relief funds at approximately 1 trillion in direct and indirect state aid and locality. Thats bipartisanship was also reflected in the committee with an understanding that for hearing is that would be no more than four witnesses would keep this brief so members could engage and have good questions but today this is out of control because of how many witnesses we have. But that is certainly the case for close to november if things become far less bipartisaner and more wacky around congress. So, here we are. Democrats are using the hearing to claim states are struggling but its certainly isnt due to the lack of funding. Of the 150 billion in direct aid provided for by the cares act, the Congressional Research found that as of june 30, the states have onlyly used 25 of e distribution. Republicans believe any Additional Support should be based on data and directly related to covid. But to date they have yet to identify how they are using their money and where additional funding to address covid19 may be needed. We should s all agree that one f the best ways to support state and local governments during the pandemic is through a strong stated and locality economies ad economies in those communities. The way to create stronger economies is by supporting local businesses and the employees of those businesses, thriving Small Businesses generate revenue that contribute to the tax base when people are working they can support their local and State Governments. Unfortunately, democrats partisanship present a Small Business from accessing that support right now so i want to and where we should begin the hearing as the Federal Reserve chairman said back in june, the stock market is probably the best single thing that the fed can do to support the games by all low and moderate income communities and particularly for the minority communities that are heavily represented of these groups. Everything we are doing is to try to get the labor market back to where it was in february. We should take that approach there are bigger issues at stake that they shoul we should be fon getting people back in school and the economy reopened again. With that i would yield back. Thank you. I now recognize the chair of the subcommittee. Thank you madam chair. Have i gotten in, m. I. On mute . You are doing great. We can hear you. I apologize. Let me begin by welcoming my neighbor. I am in kansas city where i served two terms as mayor. I can say with absolute certainty kansas city like many others is experiencing unprecedented stress during this pandemic and every municipality and county in the nation are being financially strappedd around from revenues and exploding expenditures. Dont take my word for it. The conservative American Enterprise institute said while revenues have declined for the first time the Great Depression and the worst is still to come theres been a lot of discussions in recent mom recent months. We will be defundin defending te and others around the country. Think you. Thank you. I now recognize the gentleman from minnesota for one minute. Thank you madam chair. As the Ranking Member mentioned, the act provided trillions to First Responders, educators and Small Business owners and it is because of b congress and this administrations quick actions that theyve begun. Efforts by the majority to use these individuals as a pond to justify billionpawn tojustify br State Governments is uncalled for. Especially states like mine have yet to use hundreds of millions in relief money givenen to them. Governor, we served together that weve had outhough weve hr disagreements we worked on several occasions. H since youve chosen to appear before the committee on the eve of another extension of your Emergency Authority i look forward to learning how you intend to in power and not penalized business owners, School Administrators and families the information they need to drive the economic comeback instead of making our children and grandchildren deeper in debt. I look forward to everyones testimony today. Od thank you very much. I want to welcome our distinguished panel of witnesses the honorable kelly the governor of kansas elected to the Kansas Senate in 2004, serving as Ranking Member of the committee from 20 of seven. Welcome. The honorable louis young served for ten years in the Guam Legislature and she held the post as ceo, president and chairwoman of the board of the bank of guam. I would note she contracted covid19 last month and it is so good to see you in recovery. Thank you for being here. The honorable michelle the governor of new mexico previously represented new mexicoep right here in the u. S. House of representatives and served as cabinet, secretary of the new Mexico Department of health and its Department Longtime services. Good to see you. Of minnesota in the National Guard and former High School Teacher and coach of a state football champion. Finally, doctor douglas deakin holds for served from 2003 to 2009. He served in the george h. W. Bush administration and without objection, your written statements will be made a part of the record. I would ask you to wrap up your testimony so we can be respectfuthey can berespectful s and Committee Members time. Governor kelly you are recognized for five minutes to present your oral testimony. Is governor kelly muted . One day i will get this. Ranking member and members of the committee i am laura kelly governor of kansas. Thank you for the invitation to testify on behalf of my state regarding our need for federal aid as they overcome the unprecedented challenges brought forth. They have seen claims that overwhelmed the department of labors antiquated computer system. At times we struggle to access personal protective equipment for the healthcare workers and adequately test the population. Our Small Businesses have suffered. Es many have been unable to make up for lost revenue and forced to furlough employees or even shut their doors completely. Through all of these challenges my administration has worked to keep families safe and healthy. I also like to thank congresswoman davis for being a strong advocate for kansas Small Businesses during the pandemic. Introducing legislation required transparency around relief funds to make sure they are getting to small kansas businesses. We will need significantly more support from our federal partners to protect our painstitutions from drastic damaging cuts. Kansas is uniquely suited to address the looming budget crisis during these unprecedented times because they have already overcome one this decade. Albeit selfinflicted rather than an act of god. In 2012, my predecessor Sam Brownback signed into law one of the most cunning and tax cut cun the states history. Ththe consequences were profoun. As a 14 year member of the state senate, i watched in dismay as other states recovered and grew in the wake of the recession. While kansas instead moved backwards. State revenues plummeted 900 million in funding was drastically cut, Infrastructure Spending was decimated and fcritical programs like medicad and temporary assistance for needy families and foster care were gutted. The rating was downgraded twice. Our agents were hollowed out, by way of health care for mr. Robert. There were so many more examples but the bottom line is that it hurt our business owners, farmers can our children, teachers, workers and families. Before the pandemic, my administrations budget was crafted to give kansas back on sound financial footing. A process we expected would take years of responsible governance. Weve prioritized rebuilding the states fiscal foundation. We reestablished Economic Development tools within the department of commerce critical to ensuring that they can compete on a global scale. We passed a Transportation Plan fully funded Public Education for the first time in years. Thankfully in 2017, a Bipartisan Group of legislators came together to undo the tax cuts implemented and began the uphill climb of closing the budget deficit. Just as we were riding the ship, we were hit with the worst pandemic inn the century. This pandemic is different. And it isnt as simple as just tightening our belts buckled. Our federal partners must step in and help. I knew firsthand cutting the local and State Government funding would hamstring the ability to fight the pandemic and leave us more vulnerable to future crises. The severe cuts dont create small government. They create a stable government. Governments that cannot provide the essential services and investments this country was built upon. Good schools, stable infrastructure, a solid social safety net and robust economy. I had a frontrow seat to the worst budget crisis in history and i know that if the most vulnerable among us the hardest. We need the local landscape to best respond to individual community needs. We need support for strategic investmentssu to stop the spread of the virus and enhance the ability and provide needed assistance to Small Businesses. We need the federal government d support the statements of kansas. We need a coherent topdown strategy that will reassure the businesses and americans that our government has a h plan to keep the economy stable until a vaccine is available. I thank you for the opportunity to speak with you this morning lod i look forward to the questions. You are recognized for five minutes for your testimony. Thank you. Chairwoman, Ranking Member and members of the distinguished community for the dissent of the nation has been a strategic position and western pacific. No stranger to the impact of the global conflict working with our economic cornerstone breaking the record on the nearly monthly basis 88 have qualms from south korea and japan. That number is now zero. Pre sp three, the unemployment was 4 and now nearly half of all private sector employees qualified and Unemployment Compensation programs in this congress. Madam chair, i think you for the inclusion in va for mentioned programs. Your actions help people you may never meet and in ways you may never know. The positive case numbers rose as the economy is reopened. To contain, i issued a second stayathome order that remains g effect today. Now government revenue has rose enough in fiscal year 2019 to cut the deficit in half and may see a 7. 2 decline in fiscal year 2021. This means dangerous cuts to the Public Health operations, drastic cuts for Public Safety and cuts to education. This story is being told in every state and territory for the country and its congressional action is serequired. The serious early on in the pandemic. The fees are temporary economic. They are the stewards and we have worked to follow all federal guidance in relation to the federal money at every juncture weve tried to match try and to never spark integrity. Accordingly, we welcomed the review by the accountability, other independent review verse and our federal partners. In the weeks ahead i ask you treat your fellow citizens residing in the nations territories continued fairness. They are included in every federal relief package. Number two, the package contains direct unemployment assistance and removes any cost share during the recession. And aid to Small Businesses is a central component of anya relif package that they be allowed the flexibility to use funds for the budget shortfall. While these steps will help, we also note that existing problems require new policy solutions to enable us to make real economic progress this addresses the 60 millican in annual tax credit statements that comect directly from and the policy that recognizes guam. Finally, i am supportive of securing eligibility to participate in the facility program. In april i wrote the Federal Reserve chairman powell, chief secretary to address the asinclusion in the program. I am pleased to hear this request is now being considered. It has been said that in times of constant struggle, b we see n individual american states and aterritories and now the United States of america. Thank you. Thank you very much, governor. I would like you to know that the successes were all because of your record budget and i want you to know that your congressional representative here has done a fabulous job in recognizing your territory. Thank you very much. Next