Scalise Backs Bankruptcy for States Over Bailouts — Let’s Make Sure States Spend Most Recent Money ‘Properly’

During a Thursday interview on Fox News Channel’s “America’s Newsroom,” Rep. Steve Scalise (R-LA) reacted to Senate Majority Leader Mitch McConnell (R-KY) saying he favors allowing states to declare bankruptcy instead of a bailout from the federal government.

Scalise argued that instead of bailing out states that were having financial problems prior to the coronavirus pandemic, states should show they are “properly” spending the relief money from the CARES Act.

“Let’s keep in mind, we’ve spent trillions of dollars to try to keep our economy held together, to keep small businesses and families and jobs,” Scalise stated. “But there was $150 billion that went to states in the last bill, the CARES Act that we passed a few weeks ago. That $150 billion is just starting to get to the states. Each state was given an allocation based on population, and then the states and local governments have access to that money to get them through the COVID-19 crisis. As some governors were having financial problems before this crisis, keep in mind, are talking about a bailout for themselves. Just remember there’s $150 billion that just went out the door. Most of those states got that money in their bank account earlier this week, so they have that money. Before they start talking about a bailout from the federal government for problems they had prior to COVID-19, let’s make sure that this money that was spent that they are just getting now is spent properly.”

He added, “Hundreds of billions of dollars are going to states, not just $150 billion that was in the CARES Act specifically for state and local governments but there is also unemployment money, there’s money, of course, we’re going to pass more money for small businesses to help save those small businesses. And by the way, that money is 75% of the money we are going to pass today, and the PPP, the Paycheck Protection Program has to be spent on workers, bringing workers off the unemployment rolls. That also saves states money. For some of these governors … New York had real serious financial problems prior to COVID-19. They are getting flushed with cash from the federal government for this crisis. Businesses and workers are getting money, as well. We know there is a shortfall everywhere. The real answer to that, Sandra, is to get our economy back open.”

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