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.