For days now Gov. Andrew Cuomo has been harping on glib comments Senate Majority Leader Mitch McConnell made when he rejected the idea that the federal government needs to send more financial aid to state and local governments during the coronavirus outbreak. He referred to the notion as a "blue state bailout," suggesting that it was largely Democratic-run states that were seeking help. The Senate leader added that if states needed money that badly, perhaps they should file for bankruptcy. Cuomo called McConnell's language "ugly" and he declared his bankruptcy idea "one of the really dumb ideas of all time." He then "dared" the senator to pass a bill that would make it lawful for states to declare bankruptcy.
Cuomo has brought up the "bailout" comments in nearly every single coronavirus presser since McConnell uttered them, adding a new grievance each time. Last week, Cuomo made the point that New York puts more into the federal pot each year than it takes out and it is one of those rare cases where the governor has had to ask for help.
"You're not bailing New York out," he said. "New York has bailed you out every year. Mitch McConnell is a taker, not a giver."
Sen. Ted Cruz (R-TX) has been listening to Gov. Cuomo's repetitive rant and told CNBC why he believes the governor is not entitled to more federal assistance.
Congress, he noted, has already authorized $3 trillion in the past few months for coronavirus relief, hundreds of billions of which was sent to state and local governments. Now that the Senate is back in session, he's noticed that a top priority of Democrats is to send another trillion to the state and local levels. Cruz shared his concerns about that priority on CNBC this week.
"A number of states have been highly irresponsible and have not lived within their means," the senator explained. "And have dug insupportable pension holes that preexisted this crisis."
Cruz used Illinois as an example, considering the state has an unfunded pension liability of $241 billion, which Cruz said was "caused by politicians who were just buying votes."
Why should Texans pay higher taxes to bail out irresponsible states with "fiscally reckless policies?"
As a result of the #CoronavirusPandemic, our country has experienced unprecedented economic devastation. But that is not a reason for states like Texas to bailout states that have been fiscally irresponsible since long before this crisis hit. pic.twitter.com/egc5SEcrFu
— Senator Ted Cruz (@SenTedCruz) May 6, 2020
One CNBC anchor reasoned that some states hit hard by the pandemic legitimately can't afford essential services, to which Cruz said he's lobbied for more flexibility with the money they've already distributed so states can use the funds for law enforcement needs. The law initially restricted the money to specific coronavirus needs. As a result of his and his colleagues' urging, he said, the Department of Treasury put out guidance that gave states more flexibility in that area.
But, he again suggested that sending even more money to state and local governments is not the answer. Cruz noted there isn't a "magic money tree" in Washington. The solution, he said, needs to be getting people back to work.
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