Trump Casts Doubt on Federal Bailout for Gold-Plated State Budgets but Does He Have the Guts to Make It Stick

(AP Photo/Manuel Balce Ceneta)

The hottest thing on Capitol Hill right now, that is, before Adam Schiff kicks off his next impeachment inquiry over the Administration’s response to Wuhan virus, is a proposal for the federal government to bail out state governments for lost revenue. This revenue, mind you, was lost because most governors were stampeded into shutting down their state’s economy in the fanciful hope of preventing the spread of a virus that, outside of New York, looks neither spreadable nor dangerous.

The letter followed a similar plea a month earlier from 20 Republican governors — including many Trump allies such as Govs. Brian Kemp of Georgia, Kay Ivey of Alabama and Henry McMaster of South Carolina — who asked Congress to boost federal funding for states dealing with an unprecedented crisis that threatened to inflict long-term damage on their fiscal health.

While Congress included more than $150 billion for states and local governments last month in a bipartisan coronavirus relief bill, the increasingly vocal requests for more funding have been met with more resistance from Republicans calling for fiscal restraint.

Some, including Trump, have cast the request as a bailout for fiscally irresponsible states that have long-running budget challenges.

“It’s not fair to the taxpayers of Florida,” Florida Sen. Rick Scott (R) said Monday. “We sit here, we live within our means, and then New York, Illinois, California and other states don’t. And we’re supposed to go bail them out? That’s not right.”

Senate Majority Leader Mitch McConnell (R-Ky.) drew bipartisan backlash last week when he said that states going through financial difficulty should be allowed to declare bankruptcy.

Hogan, who has said that his state is among several that could face a revenue shortfall without federal aid, panned the idea as “the last thing we need in the middle of an economic crisis.”

What really has them in an uproar is that neither Trump nor McConnell seem inclined to support a bill that is supposed to provide money to state governments for TWO YEARS because of the actions of the past 60 days.

McConnell, for his part, is insisting that any state bailout give businesses safe harbor from liability over Wuhan infections incurred by workers after they re-open. (Looked for the video but couldn’t find it):

Democratic leaders are panning Mitch McConnell’s offer to marry new liability protections with aid to state and city governments, signaling a tough fight is ahead for Congress’s next round of coronavirus aid.

Senate Majority Leader Mitch McConnell (R-Ky.) said in an interview on Monday afternoon that he is “going to insist” that providing liability protections to businesses and employees be part of the next bill that will provide billions to local governments. But Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) may not go along.

I have to admit have next to zero sympathy for states who deliberately sabotaged their own economies and inflicted hardship and stupidity on their constituents (here I’m talking directly to my governor, Larry Hogan, who can stuff a case of facemasks up his fat butt, but there are many others in the same league). I fail to see the purpose of supporting state functionaries at the expense of the rest of the nation. I am at a loss to find a single state program that I’d contribute an extra dollar to support.

There are two immutable facts here. First, Trump is mostly right. The people who suffer from this will be state governors and legislatures and bureaucracies that are Democrat fiefdoms. Even before this crisis was generated, New York Governor Andrew Cuomo was trying to plug a $6+ billion hole in his state budget. Illinois, thanks to the fecklessness of its politicians and rapaciousness of its public employee unions was heading towards being sold for scrap and spare parts to pay its creditors. California is close behind. Using the self-inflicted wound of state mandated economic shutdowns to force these progressive sh**holes to dismantle their patronage systems and give citizens some breathing room from oppressive supervision has a certain irony to it that is difficult to resist. And McConnell is right, too. Any payments to the states must come with an immunity agreement to protect businesses from the Democrat ally, the trial lawyers associations.

The second fact is that if this bailout is scuttled, it will be demagogued in a way that will put Paul Ryan pushing Granny over the cliff to shame and that will cause some damage both to Trump and to the GOP Senate caucus. For Trump and McConnell to hold fast in face of this massive and unjustified bail out of states who were living way above their means long before the Wuhan virus arrived will require political will and courage. Can they make it stick?