WASHINGTON – US President Donald Trump on Monday (April 27) slammed US cities and states seeking billions more dollars in federal aid to offset huge losses from the coronavirus outbreak as members of Congress spar over the next round of potential economic relief.
Democrats want more aid to help cities and states left out of the nearly US$3 trillion in economic relief already enacted during the crisis. But some Republicans have balked at the price, and the Senate’s top Republican said he would back state bankruptcy before giving them more US funding.
“Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking?” Trump wrote on Twitter.
Mayors and governors have been facing financial crisis as US coronavirus cases topped 960,000 and led to nearly 55,000 deaths.
Social distancing and stay-at-home orders to curb the virus have also triggered a surge in unemployment, curtailed consumer spending and depressed local tax revenue.
Congress has allocated US$150 billion for state and local governments, but governors requested another US$500 billion and cities and counties want US$250 billion to cover the costs of responding to the outbreak and replace lost revenue.
Trump, a Republican seeking re-election in November, appeared to back Senate Majority Leader Mitch McConnell, who last week said on conservative talk radio he “would certainly be in favour” of letting states enter bankruptcy.
But other Republicans, including Maryland Governor Larry Hogan, who chairs the National Governors Association (NGA), and some Republican senators, support funding for state and local governments.
Democratic governors, including NGA Vice Chairman and New York Governor Andrew Cuomo, have blasted McConnell’s idea, saying their states pay far more in federal taxes than they take in and allowing bankruptcy would upend financial markets.
McConnell said in a radio interview on Monday that he was not recommending bankruptcies.
“I was pointing out they have their own fiscal problems that predate the coronavirus and I was not interested in borrowing money from future generations to fix age-old problems,” he said.
“There probably will be another state and local funding bill, but we need to make sure that we achieve something that will go beyond simply sending out money,” McConnell said.