State Bailouts Will Fund Partisan Warfare – By Jessica Anderson (Real Clear Policy) / April 20 2020
The president has rightly put governors on the front lines in the war against the economic and health impacts of COVID-19. People in each state have unique but real needs. The federal government has an important role to play in providing relief, but it should be temporary and targeted to the virus and the virus’ impact. But now, calls from Democratic and big-spending Republican governors have started pouring in for billions in “unrestricted aid” — that’s code for state bailouts.
State bailouts will reward fiscal mismanagement and will turn taxpayer dollars into a partisan weapon.
After blocking increased funding for small business loans last week, Senator Chuck Schumer and Speaker Nancy Pelosi demanded $150 billion for states and localities. Their demand was followed by a request from the National Governors Association and repeated demands from New York Governor Andrew Cuomo for billions in unrestricted aid — not just money for coronavirus aid, but for pre-existing state programs and debts.
And it’s no wonder Cuomo is so desperate for the federal government to bail him out: New York’s rainy day fund is one of the lowest in the nation, and the state owes over $450 billion in unfunded pension and post-employment benefits. Other states are in even worse shape — Illinois has already requested a massive $40 billion bailout, most of which would go to pension and budget shortfalls caused by decades of reckless fiscal mismanagement.
Let’s be clear, the federal government has already allocated well over two trillion dollars for coronavirus relief. And contrary to Governor Cuomo’s assertion that states have received “nothing,” states have been given over $200 billion directly, on top of what they normally receive from grants. In addition, the federal government has indirectly given states $377 billion in relief to their small businesses, $293 billion in cash directly to their citizens, $268 billion in additional funds for their unemployment insurance programs, and billions of dollars for other programs including Medicaid, cultural institutions and food stamps.
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