McConnell’s Rejection of Aid for States Risks Causing a Depression

McConnell: worse person in Washington?

There are few individuals in Washington, D.C., more evil than Mitch McConnell - Trump is perhaps the only one worse.  McConnell had no problem giving a $1.5 trillion tax break to the wealthy and large corporations, most of which used the funds to buy back stock and further enrich their senior officers. Likewise, McConnell and his wife have used their positions to secure all kinds of sweetheart deals and enrich themselves.  Now, with the nation in the grip of a pandemic, McConnell says he would prefer states go bankrupt - cutting all kinds of essential services upon which citizens depend - rather than provide federal aid to states.   When it comes to helping states and average Americans, McConnell's response is "f*ck you" and/or "go die." The man is despicable and has done extreme damage to the nation.  If anyone needs to be stricken by the virus, I'd nominate McConnell.  A piece in the Washington Post looks at McConnell's reckless insanity.  Here are excerpts:

Senate Majority Leader Mitch McConnell (R-Ky.) would rather see states declare bankruptcy than give them federal aid to deal with the economic collapse triggered by the coronavirus pandemic.

That’s a recipe for turning a potentially short recession into a prolonged depression, according to officials and analysts.

The question of whether Congress and the White House should provide relief funding to state and local governments — as the feds have done already for private business — is about to reach a showdown in Washington.

The stakes are high in our region, where state and local officials say that without federal action they will have to make even deeper cuts than feared in core services such as education, housing and health programs (apart from those required to fight the virus).
Governors, mayors and county leaders of both parties are clamoring for help in the next federal rescue package after McConnell and President Trump blocked such assistance in the $484 billion bill approved last week.

Maryland says the shutdown could cost it as much as $2.8 billion in lost tax revenue in just four months — from March through June.

“I would describe this as worse than the 2008-2009 recession,” Franchot said. “That was a huge fiscal and monetary catastrophe, but we didn’t see 340,000 Marylanders file for unemployment in three weeks.”

In an earlier relief package passed last month, Congress approved $150 billion for state and local governments — but with an important condition. It said the money could be spent only to cover new costs of fighting the virus, and not to replace revenue lost because of the economic slump. State and local leaders are calling for the next bill to eliminate that restriction.

“We’re not going to get out of this pandemic and this budget mess unless the people on the ground instead of people in Washington, D.C., are given flexibility to use the money as they know how to help the economy recover,” Fairfax County Board Chairman Jeff C. McKay (D-At Large) said.

Fairfax is projected to lose at least $165 million over 12 months because of plunging sales tax receipts and other effects of the shutdown. It already has dropped plans to increase spending on affordable housing, early-childhood education and police body cameras.

They [Republicans] said they feared that states and localities would move more slowly to reopen their economies if they received federal assistance. State and local leaders retorted that they will open their economies as soon as public health authorities say it’s safe to do so.

The other argument against federal aid, voiced by McConnell, is that it would bail out states that he said have mismanaged their finances in the past, such as by incurring large pension obligations for teachers and other public employees. In a radio interview Wednesday, McConnell suggested instead that states declare bankruptcy.

The comment drew widespread backlash.

“This is grossly irresponsible with a naive sense of what state and local governments do,” tweeted Amy Liu, director of the Brookings Metropolitan Policy Program. “Without emergency relief as their revenues crater, state and local governments will not be able to run key programs like unemployment insurance, social services, housing assistance and small business outreach needed to protect people and businesses in this crisis.

“If you want to send the country into an extended depression, sending state and local governments into bankruptcy is a great way to do it,” said a local government budget expert, who spoke on the condition of anonymity because they were not authorized to speak publicly.

Our region’s state and local governments are bracing for severe spending cuts, with the burden expected to fall heavily on two areas that make up a large part of their budgets — education and health care.

Virginia has already suspended plans to increase spending on K-12 education by $540 million over two years, higher education by $356 million and Medicaid by $207 million.

The District is projected to lose $1.5 billion in revenue over the next 17 months. Barring substantial federal aid or tax increases, cuts are expected to fall heavily on affordable housing, education and services that help low-income residents, according to Tazra Mitchell, policy director of the D.C. Fiscal Policy Institute.

McConnell’s attacks on states’ fiscal management drew sharp rebukes from area officials. They noted that Virginia, Maryland and the District also have Triple-A bond ratings. Additionally, states, unlike Congress, are required to balance their budgets.

McKay noted: “Fairfax has a Triple-A bond rating and a balanced budget. Compare that to Mitch McConnell’s record on deficits. It’s laughable.”