GOP Senators to Trump: Reject ‘Blank Check’ Bailouts to State Governments

Several Republican senators wrote to President Donald Trump on Thursday, urging him to reject a “blank check” bailout to indebted states that would not help states’ response to the coronavirus outbreak.

Sens. Rick Scott (R-FL), Ted Cruz (R-TX), Ron Johnson (R-WI), Mike Lee (R-UT), and Mike Enzi (R-WY) urged Trump to reject any bailouts for state and local governments in a future bailout bill.

House Speaker Nancy Pelosi (D-CA) said on Thursday that a future spending package would need $1 trillion to bail out state and local governments.

Senate Majority Leader Mitch McConnell (R-KY) has continually rejected the idea of bailing out indebted states.

“We’re not interested in borrowing money from future generations to send down to states to help them with bad decisions they made in the past unrelated to the coronavirus epidemic,” he said.

The GOP senators contended that states would use the bailout to help out with expenses unrelated to the coronavirus response.

“Unfortunately, we are hearing reports that some states and localities are advocating that a potential future Coronavirus response measure be used as a piggybank for unrelated expenses that have nothing to do with responding to the Coronavirus,” they wrote.

The senators continued:

We believe additional money sent to the states for “lost revenue” or without appropriate safeguards will be used to bail out unfunded pensions, reward decades of state mismanagement, and incentivize states to become more reliant on federal taxpayers. Again, we are supportive of funding to respond to the Coronavirus and protect our frontline workers, but we cannot allow states and localities to get a blank check from American taxpayers to fund areas of their budget that have nothing to do with the Coronavirus.

States like New York are calling for billions in unrestricted aid — not just money for Coronavirus recovery, but for pre-existing state programs and debts. 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 $40 billion bailout, most of which would go to pension and budget shortfalls caused by decades of fiscal mismanagement.

“And let’s not forget, this year’s federal budget deficit will be the largest in the history of our nation, in excess of the cumulative deficits for the first 200 years of our country’s existence,” the senators added. “We will end the year with in excess of $25 trillion in federal debt.”

“Americans expect that their tax dollars will be used for Coronavirus response, not to backfill decades of bad fiscal policy. As we continue to work to help families across the nation, we respectfully ask that you to oppose bailouts for states,” the Republican conservatives wrote to Trump.

“America has faced many crises throughout our history – crises that demanded difficult decisions. Coronavirus is no different. Government at every level must work together to spend taxpayer dollars wisely to end the Coronavirus crisis,” the senators wrote.