Richard Ravitch helped save New York City from bankruptcy in the 1970s. He says there’s plenty of reason to now bail out cities and states facing financial crises as a result of the coronavirus pandemic, including New York — in fact, he writes in a New York Times op-ed, there are millions of reasons for the federal government to help:
“Imagine that cities and states were considered an industrial sector, like automobiles or airlines. Collectively, they employ about 23 million essential workers like teachers, police officers and firefighters. They contribute over $3 trillion to the nation’s gross domestic product.
“Now imagine that one of the most important industry players was New York City, which employs about 325,000 workers. They, along with the city’s 3.5 million private-sector workers in finance, entertainment, communications and other industries, add $1 trillion annually to the country’s gross domestic product.”
Only the federal government can help, Ravitch writes, and without such aid cities will have to cut essential workers, pile on debt that will strain their finances for years or, in some cases, declare bankruptcy. New York’s Metropolitan Transportation Authority, which Ravitch led four decades ago, warned Wednesday that it would have to slash subway and bus service by 40% and cut more than 9,300 jobs if it doesn’t get more federal aid.
President-elect Joe Biden will have to act quickly since President Trump and Senate Republicans have objected to providing aid to what they describe as badly run Democratic-led states, even as red states face plenty of financial pain as well. Senate Majority Leader Mitch McConnell (R-KY) this week said that Democratic demands for “a massive slush fund” for state and city governments have blocked bipartisan action on a Covid relief package.
Ravitch responds to such criticisms by arguing that New York and other cities are in trouble “not because of overspending, as Republicans imagine, but because of a badly managed pandemic.” And if Congress can help important industries hit hard by the virus outbreak, “it can also surely aid states and cities.”
Read the full op-ed, including Ravitch’s recommendations for steps Biden should take, at The New York Times.