‘There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations…’
(Claire Russel, Liberty Headlines) President Donald Trump suggested via Twitter on Monday that the federal government should not bail out fiscally irresponsible states and cities run by Democrats.
Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking?
— Donald J. Trump (@realDonaldTrump) April 27, 2020
Trump’s suggestion comes amid an ongoing battle between congressional leaders over how much aid Congress should give to the states as they begin to reopen.
Senate Majority Leader Mitch McConnell has called for a “pause” on further aid, and suggested that the federal government should let cash-strapped states go bankrupt.
“I think this whole business of additional assistance for state and local governments needs to be thoroughly evaluated,” McConnell told conservative radio host Hugh Hewitt last week.
“There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations,” he said.
States cannot technically declare bankruptcy to avoid their financial obligations, but McConnell suggested creating a way for them to do so rather than driving the federal government further into debt to bail them out.
“I would certainly be in favor of allowing states to use the bankruptcy route,” he said. “It saves some cities. And there’s no good reason for it not to be available.”
McConnell’s remarks drew condemnation from New York Gov. Andrew Cuomo, who said forcing states to declare bankruptcy would be “one of the saddest, really dumb” policies ever adopted.
“OK, let’s have all the states declare bankruptcy—that’s the way to bring the national economy back,” Cuomo said sarcastically during a press briefing last week.
Cuomo, whose state has been the epicenter of the U.S. pandemic, has been particularly generous with federal resources, offering his supply of thousands of ventilators to other states after previously demanding 30,000 from Trump.
He also is one of several sanctuary-state governors, along with Democrat Govs. Gavin Newsom of California and Phil Murphy of New Jersey who, in spite of the critical need to address health spending, have pledged to provide financial support to illegal immigrants.