Rejecting Federal aid for US states amid the Coronavirus crisis, Senate Majority Leader Mitch McConnell (pictured) says they can declare bankruptcy.
Congress passed a $484 billion supplemental Coronavirus relief package on Thursday, funding an exhausted loan program for small businesses and providing money for hospitals and virus testing.
But McConnell and senior Republican legislators blocked Democratic attempts to provide support for states who are facing multi-billion dollar deficits and soaring unemployment figures.
McConnell, whose state of Kentucky is among the leading recipients of Federal aid, declared:
I think this whole business of additional assistance for state and local governments needs to be thoroughly evaluated. There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations….
I would certainly be in favor of allowing states to use the bankruptcy route.
His staff politicized the issue by sending out a statement “Stopping Blue State Bailouts”.
The hardest-hit US states from Coronavirus — such as New York, New Jersey, Michigan, and Illinois — have Democratic governors.
New York Gov. Andrew M. Cuomo said of McConnell’s statement:
[This is] one of the saddest, really dumb comments of all time. OK, let’s have all the states declare bankruptcy — that’s the way to bring the national economy back.
He criticizing the Majority Leader for labeling states as Democratic or Republican rather than “states where people are dying. Why don’t we think about that? Not red and blue. Red, white and blue. They’re just Americans dying.”
States were allocated $150 billion in the initial $2.2 trillion Coronavirus relief package on March 27, but Cuomo and other governors have noted that the amounts are insufficient to cover their burdens.
“They funded small businesses. Great, good move. How about police? How about fire? How about teachers? How about schools?” Cuomo asked.
Another 4.4 million Americans filed for unemployment assistance in the week ending April 17, bringing the total to 26.4 million over the past five weeks.
The figures are thought to be even higher, as states struggle to process the record-setting pile of applications. Before last month, the record week for claims was 695,000 in October 1982.
But McConnell framed any assistance as relief for state pension funds: “We all have governors regardless of party who would love to have free money.”