Reject COVID-19 bailouts
American taxpayers must ultimately bear the cost of all this proposed new spending.
As America continues to work to reopen the economy and end the coronavirus, Congress must focus on three things to help us recover stronger: suppressing the pandemic, getting people back to work safely, and preparing for the next potential crisis.
Unfortunately, many lawmakers are trying to use this crisis to push their irresponsible spending priorities that have nothing to do with the coronavirus, including a massive taxpayer bailout of poorly managed states. Just last week, a minority of the Senate blocked a $650 billion coronavirus relief bill because it failed to include trillions for state and local bailouts.
That’s not fair to states like Florida, where we’ve made the tough choices to put our state on a financially secure path. Bailing out the bad budgets and pension plans of poorly run states would impose a huge burden on Florida taxpayers, and do severe damage to our economic recovery. We have worked too hard to give every family in Florida a chance to live their American dream and should not be bailing out states that have been fiscally irresponsible for decades.
According to the Bureau of Labor Statistics in 2018, Hispanic Americans made up the second largest share of the labor force at 17.5 percent, and are expected to increase more than any other group by 2028. Hispanic business owners have made major strides during the past decade as well. According to a Stanford study, the number of Hispanic business owners grew 34 percent while the overall number of business owners grew just 1 percent.
Earlier this year, Congress and President Trump came together to pass the largest federal government aid package in our country’s history — the Coronavirus Aid, Relief, and Economic Security (CARES) Act —a $2 trillion measure intended to address the unprecedented challenges, and minimize threats, from the coronavirus and the economic damage it has caused. Timely and targeted government action was necessary to help individuals and small businesses. And this timely funding was particularly welcomed in some of our hardest-hit communities, including South Florida.
This isn’t the only assistance that’s been made available to state and local governments. Earlier this year, the Federal Reserve announced the Municipal Liquidity Facility, a bridge loan program to help governments weather the pandemic. This program recognizes the damage that has been done to government balance sheets, and gives loan recipients up to three years to repay. The initiative should help up to 270 cities, counties, and states to better manage their cash flow during unpredictable times. Sadly, barely any cities, counties, or states have actually leveraged this resource.
Because of these programs, and rainyday funds that are in place in the overwhelming majority of states, there is substantial help already available to states and cities dealing with temporary budget challenges resulting from the coronavirus. As a reference, the bipartisan package also included $150 billion in assistance to state and local governments — funding that has not yet been completely spent.
Unfortunately, too many in Washington are more eager to cut another multitrillion-dollar check, paid for with borrowed money, than to make responsible choices. The House approved $3 trillion more in stimulus spending in May — including $1 trillion in bailout funding to state and local governments. House leaders now say that’s not enough, and are insisting on trillions in new spending. Instead of recklessly spending with no plan, we should focus on how to repurpose the unspent money to directly help those in need.
American taxpayers must ultimately bear the cost of all this proposed new spending — quite possibly in the form of tax increases. And the tab is already intimidating. The national debt is currently at nearly $27 trillion — with the last $3 trillion coming in just the last few months. And even if no new federal bailouts are approved, the Treasury Department expects to add another $2 trillion to the debt in the second half of this year.
At some point, Congress needs to get serious about the impact of this spending and start getting a return on taxpayer dollars. Congress should be focused on policies that bolster the economy and create a strong fiscal foundation where individuals and small businesses can thrive.
We know every American family has been impacted by the coronavirus. This virus was something none of us could control. As families try to figure out how to make ends meet and how to ensure their kids get the best education they can, the last thing they need is to worry about bigger tax increases down the road. Nogrowth policies and irresponsible spending is a virus Congress can control. Rick Scott is the junior U.S. senator from Florida. Daniel Garza is president of The LIBRE Initiative.