Parties jostle over help for struggling states
What happened
Democrats and Republicans set out radically different priorities on coronavirus relief this week, setting up a protracted fight over aid to cash-strapped states, jobless Americans, and beleaguered businesses. House Democrats called for $700 billion for states, as well as an increase in food stamp benefits and money to pay for mail-in and early voting in the 2020 election. Democrats are pushing for an even greater expansion of safety net programs; House Speaker Nancy Pelosi said a national guaranteed income was “worthy of attention.” By contrast, Sen. Majority Leader Mitch McConnell (R-Ky.) said that any state aid would have to be contingent on a federal law protecting businesses that reopened from a potential “avalanche of lawsuits,” calling it a “red line” for any legislation.
States face a one-two punch of increased health-care and unemployment spending, worsened by a sharp drop in sales tax receipts. Most states are legally required to balance their budgets, potentially forcing huge cuts in education, Medicaid, transit, police forces, and fire departments. Still, McConnell said he was against a “blue-state bailout.” He blamed state woes on mismanagement and suggested that states short of money should be forced into bankruptcy. That drew a harsh response from Democratic New York Gov. Andrew Cuomo, who called the idea “one of the dumbest statements of all time” and “incredibly shortsighted.” McConnell later backtracked to say that state aid was “highly likely,” but couldn’t be used to solve problems that states had “created for themselves over the years with their pension programs.” President Trump said he’d approve state aid only if immigration policies are tightened in “sanctuary cities.”
What the editorials said
“Democratic lawmakers need to hold the line” on their demands for state aid, said The New York Times. Last round, they settled for aid for hospitals and testing with the promise of revisiting the issue. Now the situation is “dire.” The Center on Budget and Policy Priorities estimates that the states must contend with a $360 billion budget gap through 2022 before they spend a penny to combat the ravages of the virus—and that’s assuming they tap rainy-day funds and get all the money appropriated by earlier stimulus rounds.
Any more federal aid to the states “should come with very strict conditions,” said The Wall Street Journal. For years Democratic governors and “their allies in public unions” have treated the public till as a piggy bank to fund lavish pensions and swollen staffs. Now they’re using the coronavirus as an excuse to transfer the burden to Uncle Sam. Congress has already given states funding equal to three months of total tax revenues—and the Fed is willing to help them with short-term debt. Anything else should be contingent on cuts and reform.
What the columnists said
The Republican position on state bailouts is “misleading,” said Philip Bump in The Washington Post. Fiscally prudent red states are not, in fact, being asked to bail out their prodigal blue-state cousins. On the contrary, states like New York, New Jersey, Connecticut, and Massachusetts receive less from the federal government for each dollar in tax revenue that their citizens send the IRS, while McConnell’s Kentucky gets more ($2.41 per dollar) than any other state in the union.
“Stop the spending spree,” said Jed Babbin in Spectator.org. Even before the pandemic struck, the federal government was shelling out $400 billion a year in interest payments on its almost $24 trillion in debt. Now the Congressional Budget Office is projecting the deficit to soar to almost $4 trillion in 2020. This debt will suppress economic growth and hamper our efforts at recovery.
McConnell’s talk of holding up another big relief bill and state bankruptcy is just his opening bid in the negotiations, said Ben White in Politico.com. He knows that the GOP’s fortunes in November are tied to the economy and that sending the country off a “coronavirus cliff” could cost the party the White House and the Senate. He’s just trying to position himself to squeeze in liability protection for businesses and hold off Democratic attempts to include other progressive priorities in the final bill. “McConnell is gaslighting Democrats (again),” said David Roberts in Vox.com. Red states need money just as badly as blue ones. “Democrats should call his bluff.”