Mitch McConnell has just set the political world on fire with comments he made on the Hugh Hewitt show about bailing out state and local governments. Here’s what McConnell quoted on his own website from his interview:
On Stopping Blue State Bailouts:
“I said yesterday we’re going to push the pause button here, because I think this whole business of additional assistance for state and local governments needs to be thoroughly evaluated. You raised yourself the important issue of what states have done, many of them have done to themselves with their pension programs. There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.”
Note the “blue state bailouts” in the subheading. That’s part of what has gotten the ire of so many Democrats.
McConnell also told Hewitt in the fuller interview that states in financial trouble should be allowed to use bankruptcy instead of getting a bailout:
I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities. And there’s no good reason for it not to be available. My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of.
You’d think by reading the headlines this morning that McConnell just set off a nuclear bomb. People are unloading on McConnell in responding to his comments, including some ‘Republicans’:
.@senatemajldr McConnell’s dismissive remark that States devastated by Coronavirus should go bankrupt rather than get the federal assistance they need and deserve is shameful and indefensible. To say that it is “free money” to provide funds for…
— Rep. Pete King (@RepPeteKing) April 23, 2020
…cops, firefighters and healthcare workers makes McConnell the Marie Antoinette of the Senate.
— Rep. Pete King (@RepPeteKing) April 23, 2020
But it’s mostly Democrats who are going nuts…
— QuickTake by Bloomberg (@QuickTake) April 23, 2020
Gov. @JayInslee on Sen. Mitch McConnell saying states should consider bankruptcy: “It was a very McConnell-ish thing to say to let states go bankrupt — it’s nuts.”
— The View (@TheView) April 23, 2020
Pelosi: What the distinguished leader on the Senate side, Mr. McConnell, said, I think the states should go bankrupt. Oh really? And not pay the health care workers and the hospitals, first responders and the rest? What made you think that was a good idea?
— Chad Pergram (@ChadPergram) April 23, 2020
Holy shit. Is this true, @senatemajldr? You’d rather see the people who live in blue states suffer than give bailout money? How about the blue states who are donor states to the federal government? You’d rather see these blue states file for bankruptcy? You’re evil. https://t.co/RqulTkVrSp
— Alyssa Milano (@Alyssa_Milano) April 23, 2020
And a few Never Trumpers:
Kentucky voters have an opportunity in November to make a change and elect someone who might actually fight for their state rather than suggesting bankruptcy, further layoffs and a kick in the shins to first responders. https://t.co/euqRRhO3mC
— Jennifer Rubin (@JRubinBlogger) April 23, 2020
McConnell’s office is distributing a document titled “Stopping Blue State Bailouts.”
So it’s probably time for Joe Biden to echo his old boss: There’s not a Blue State America and a Red State America. There’s the United States of America.
— Bill Kristol (@BillKristol) April 23, 2020
Just for the record, here are McConnell’s comments in full from the Hugh Hewitt show (via RCP):
HUGH HEWITT, HOST: Now Leader, I want to go back to legislating in the environment in which we are in. I know when you put the CARES Act together, you used taskforce, you used some of your best people like Marco Rubio. I have great respect for Lamar Alexander. A lot of the state governments are going to be smashed up by this. But there is no Chapter 8 in the bankruptcy code. Who are you going to, you know, for states, no states can go bankrupt. Local governments can go bankrupt and reorganize. Who are you going to task to lead the effort on deciding what to do or not to do for the states?
SENATE MAJORITY LEADER MITCH MCCONNELL: Yeah, well, I think it’s going to be a broad discussion without, you know, throughout the conference. I mean, we all represent states. We all have governors regardless of party who would love to have free money. And that’s why I said yesterday we’re going to push the pause button here, because I think this whole business of additional assistance for state and local governments need to be thoroughly evaluated. You raised yourself the important issue of what states have done, many of them have done to themselves with their pension programs. There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations. So this is a much bigger conversation than we’ve had providing assistance for small business because the government shut them out, put them down, put them out of business, or assistance to hospitals which were overwhelmed by the COVID-19 disease. This is a very different decision. These are all taxing authorities, just like we are, and I think that’s why we need to have a fulsome conference-wide discussion among Senate Republicans before we go down this path.
HEWITT: I agree. I think people do not understand how badly mismanaged some states have been, and their unfunded liabilities. And if they were in the private sector, they would have to reorganize under the bankruptcy code. But there is no bankruptcy code chapter. Do you think that we need to invent one for states so that they can discharge some of these liabilities that were put in place by previous governors like, I mean, Jerry Brown ran a giveaway program for public employee unions that was just astonishing, and as did Gray Davis, as did, you know, a lot of Democratic governors, Illinois is probably the worst, and Connecticut. They’ve just given money away for years to people who aren’t working.
MCCONNELL: Yeah, I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities. And there’s no good reason for it not to be available. My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of.
Judge for yourselves, but his comments sound entirely reasonable to me. He’s just saying that states should not be allowed to take advantage of this crisis to get funding to fix problems they created themselves well before this crisis ever happened. You know, by stealing from their pension programs and what not. There should be consequences for mismanagement and if that includes bankruptcy, so be it.