Senate Majority Leader Mitch McConnell said Wednesday he favors allowing states struggling with high public employee pension costs amid the burdens of the pandemic response to declare bankruptcy rather than giving them a federal bailout.
“I would certainly be in favor of allowing states to use the bankruptcy route,” he said Wednesday in response to a question on the syndicated Hugh Hewitt radio show. “It’s saved some cities, and there’s no good reason for it not to be available.”
The host cited California, Illinois and Connecticut as states that had given too much to public employee unions, and McConnell said he was reluctant to take on more debt for any rescue.
“You raised yourself the important issue of what states have done, many of them have done to themselves with their pension programs,” he said. “There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.”
McConnell’s remarks drew a biting response from state and local officials.
New Jersey Governor Phil Murphy, a Democrat, said he was stunned by McConnell’s comments, which he called “completely and utterly irresponsible.”
“He’s dead wrong. You have my word we won’t go bankrupt,” he said. Without cash to states, Murphy said, governors will be forced to “gut the living daylights out of every state of America,” slashing budgets and eliminating the services people need.
New York Mayor Bill de Blasio, also a Democrat, tweeted that McConnell “wants police officers to lose their jobs. He wants firefighters to go broke. He wants hospitals to close and sick people thrown out on the street.”
McConnell’s statements also set up a conflict with House Speaker Nancy Pelosi, who said on Bloomberg Television Wednesday that a “major package” of aid for state and local government will be in the next stimulus legislation considered by Congress.
McConnell may also find himself in conflict with President Donald Trump. The president said Tuesday after meeting with New York Governor Andrew Cuomo that states will need assistance. “And I think most Republicans agree too, and Democrats,” Trump said. “And that’s part of phase four.”
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McConnell, a Kentucky Republican, said he blocked additional state and local aid in the latest relief package, which passed the Senate Tuesday and is set for a vote Thursday in the House.
“I said yesterday we’re going to push the pause button here, because I think this whole business of additional assistance for state and local governments needs to be thoroughly evaluated,” McConnell added.
Later, on Fox News, McConnell said that any state or local aid must be specifically linked to the pandemic and shouldn’t be viewed as an opportunity for “revenue replacement.”
“We’re not interested in solving their pension problems for them,” McConnell said. “We’re not interested in rescuing them from bad decisions they’ve made in the past. We’re not going to let them take advantage of this pandemic to solve a lot of problems that they created for themselves with bad decisions in the past.”