Trump and Cuomo Battle Over State ‘Bailouts’

Trump and Cuomo Battle Over State ‘Bailouts’

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Plus, Pelosi looks for leverage on next coronavirus bill
Tuesday, May 5, 2020

Trump and Cuomo Battle Over State ‘Bailouts’

President Trump said Monday that Republicans don’t want to provide “bailouts” to states that are struggling financially amid the coronavirus pandemic. “I think Congress is inclined to do a lot of things but I don’t think they’re inclined to do bailouts. A bailout is different than, you know, reimbursing for the plague,” Trump told the New York Post.

Trump framed the issue in starkly partisan terms, misleadingly portraying Republican-led states as fiscally healthy, unlike those led by Democrats.

“It’s not fair to the Republicans because all the states that need help — they’re run by Democrats in every case. Florida is doing phenomenal, Texas is doing phenomenal, the Midwest is, you know, fantastic — very little debt.” Illinois, New York and California, by contrast, have “tremendous debt,” Trump said.

“I don’t think the Republicans want to be in a position where they bail out states that are, that have been mismanaged over a long period of time,” he added.

Cuomo responds: New York Gov. Andrew Cuomo on Tuesday warned Trump and Republican lawmakers about the economic risks of denying states the funds they need to keep operating.

“What we're asking, every state is asking, because of the coronavirus, we need financial help in restarting the economy, and that's what we're asking for from the federal government," Cuomo said at his daily briefing. “If you starve the states, how do you expect the states to be able to fund this entire reopening plan which the governors are in charge of.”

Whatever the party affiliation of the governors may be, all states need help right now due to widespread shutdowns and plunging tax revenues, Cuomo said. “[T]his is not a blue state issue. Every state has coronavirus cases. And it's not just Democratic states that have an economic shortfall – Republican states have an economic shortfall.”

The New York governor also rejected the use of the term “bailout” by Republican leaders, calling it “such a loaded word, such a rhetorical, hyperbolic word.”

Cuomo added that he thinks the current partisan debate over aid to the states is “counterproductive” and “will lead to defeat for all of us,” and laid out the course of action he would like to see Washington take: “You need a bipartisan bill to pass, you go down this path of partisanship and politics, you will never pass a bill,” he said. “And if you never pass legislation you'll never get this economy back on its feet.”

The truth about states’ fiscal picture: As numerous reports have noted, both blue and red states are feeling the economic effects of the coronavirus. Unemployment is soaring in all states, devastating income and sales tax collections, Michael Leachman, senior director of state fiscal research at the left-leaning Center on Budget and Policy Priorities, wrote in a report published Monday. “Both ‘red’ and ‘blue’ states will need more fiscal relief to avoid having to make deep budget cuts to meet their balanced-budget requirements, which would hurt families and communities while worsening the recession,” the report said.

Officials in 21 states have already revised revenue estimates lower for 2021, sometimes substantially so. Of those 21 states, 10 voted for Trump in 2016, while 11 voted for Hillary Clinton, Newsweek reports.

Pelosi Looks for Leverage on Next Coronavirus Bill

House Speaker Nancy Pelosi is pushing ahead on the next round of coronavirus legislation, aiming to pull together a sweeping aid package that could top $800 billion or $1 trillion, according to various reports.

House Democratic leaders are hoping to finalize the bill by the end of the week, with Pelosi urging her members to “think big,” according to Politico. The package could be ready for a House vote as soon as next week.

Yet even as Pelosi and House Democrats look to fast forward on the next phase of coronavirus relief, President Trump and top Republicans insist it’s time to press pause before considering additional coronavirus spending measures.

"I think I can speak for our conference by saying we're not ruling that out but we think we ought to take a pause here, do a good job of evaluating what we've already done," McConnell told reporters Tuesday about a fifth coronavirus bill, according to The Hill. "The Senate Republican majority and the president of the United States are not irrelevant to the process, so we're going to keep talking to each other and decide to act when and if it's appropriate to act again.”

The Senate returned to the Capitol this week and is expected to stay in session until its Memorial Day recess, but its immediate focus will be on considering Trump nominees, not legislation to address the pandemic.

The Democratic strategy: On a Monday afternoon call with members, “Pelosi and her deputies sketched the outline of a trillion-dollar-plus package that would deliver aid to state and local governments — some on the brink of public service cuts — while shoring up safety-net programs for the nation’s most vulnerable,” Politico’s Heather Caygle and Sarah Ferris report. Democrats are also focused on providing funding for more robust testing and are expected to propose another round of direct payments to individuals and further extending unemployment insurance. Pelosi reportedly also talked about a “paycheck guarantee” for those who have lost their jobs.

But beyond the specifics of any legislative proposals, the rush to produce a bill is about gaining some leverage in future negotiations with Trump and Senate Republicans. “Democrats privately admit the expansive legislation is more of a policy wishlist than anything — much like a draft proposal Pelosi released in March — but say they hope to move before the Senate crafts legislation, laying down the starting point for bipartisan negotiations,” Caygle and Ferris write.

The GOP strategy: Republicans are also jockeying for leverage. “By reconvening this week, Senate Republicans are trying to set the terms of debate, frustrated that Pelosi was able to fill up earlier aid bills with Democratic priorities,” Lisa Mascaro of the Associated Press writes. “They’re reluctant to unleash federal funds beyond the nearly $3 trillion Congress already approved in virus relief and hope Trump’s push to re-open will reduce the need for more aid.”

Senate Majority Leader Mitch McConnell on Tuesday declined to back Trump’s call for a payroll tax cut, though he did signal an interest in ramping up testing and reiterated that any new package must protect businesses from coronavirus-related lawsuits, an idea Democrats have dismissed.

“I’m not ruling in or ruling out anything, except to say that if there is another bill that passes in the Senate, it will include the liability protections,” McConnell told reporters. He said Senate Republicans are “working on a narrowly crafted liability protection” that “will not protect somebody from gross negligence.”

Signs of hope: Some GOP lawmakers have expressed openness to providing additional aid for state and local governments in exchange for business liability protections, Bloomberg’s Erik Wasson and Laura Litvan report, adding that Pelosi “has indicated at least partial agreement” with McConnell that state aid should be focused on the effects and costs of the pandemic.

The bottom line: It hasn’t changed. The next coronavirus package is likely to take weeks.

Quote of the Day

“My conservative friends don’t think states and cities deserve help. My progressive friends think certain businesses don’t deserve help. And my libertarian friends don’t want anyone to get help.

“These are the seeds of long, slow, painful recoveries.”

— Tony Fratto, former deputy press secretary and assistant Treasury secretary in the George W. Bush administration, in an article by Neil Irwin of The New York Times about controversies over federal aid to businesses.

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