States Demanding Bailouts: ‘Beyond Galling,’ ‘Shameless,’ Too

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Ira Stoll writes: Democratic politicians are eying the newly limitless federal budget with the appetite of coronavirus-era shoppers swarming a new shipment of toilet paper.

“We’re in need. Where are you?” the mayor of New York City, Bill de Blasio, tweeted at President Trump on Sunday, asking Mr. Trump to press Senate Republicans to include money for cities and states in “this next stimulus package.”

The president of the Illinois State Senate, Don Harmon, is asking for $40 billion in federal aid, $10 billion of it to prop up the state’s pension system, the New York Times reports.

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Mr. Trump and Senate Majority Leader McConnell may be tempted to respond to these entreaties the same way they do requests to restore the unlimited federal tax deduction for state and local taxes paid. That is, to tell the Democratic states to get lost. The federal government, at least the Republican-led parts of it, has zero desire to enable the Democrats’ bad habits.

There’s an alternative approach, though, that could be even more constructive. Messrs. Trump and McConnell could use their newfound financial leverage to demand policy reforms that would diminish the long-term structural dysfunctionality of these states.

There’s plenty of precedent for federal funding having strings attached. Federal education aid and defense contract dollars come with civil rights nondiscrimination provisions. In the Obama administration, Democrats put conditions on expanded Medicaid funding. President George W. Bush teamed up with Senator Edward Kennedy to make expanded federal education funding conditional on increased accountability, testing, and transparency. One might argue about the merits of any particular set of conditions, but the point is, there were conditions. (Read the rest)

https://twitter.com/PamelaGeller/status/1251189105712603139

State Bailouts: ‘Beyond Galling,’ ‘Shameless,’ Too

Editorial of The New York Sun | April 20, 2020

The drama of profligate states using the coronavirus pandemic as an excuse to seek federal bailouts to paper over long-term mismanagement has finally found a Pavarotti — the editorial board of Chicago Tribune. It uncorked this morning an editorial calling pleas for as much as $40 billion in federal lucre for Illinois “shameless,” “dishonest,” “beyond galling,” And it was just getting tuned up.

We share the Tribune’s sentiments, not only in respect of Illinois but New York as well. And not just those two. “Every member of Congress should carefully scrutinize pleas from states whose unbalanced budgets, embarrassing credit ratings and vastly underfunded pension systems predated virus outbreak,” the Tribune reckons. It’s hard to imagine that there are not millions of Americans who share the sentiment.

The grand tenors of the Tribune were ignited by a letter to the Illinois congressional delegation in Washington from the president of the Illinois senate, Don Harmon. The Harmon epistle was so craven that even Governor Pritzker made a point of distancing himself from it. Yet the idea of a federal bailout for Illinois in the midst of this crisis is broadly supported within the Democratic party in the state, and even by some Republicans.

Our own Ira Stoll, in a column this morning, touches on the Harmon letter. He goes on to note that President Trump and Senator McConnell, may be tempted to tell the Democratic states to get lost. Mr. Stoll offers an alternative approach — using the sudden federal financial leverage “to demand policy reforms that would diminish the long-term structural dysfunctionality” of the mendicant states.

What Mr. Stoll marks is the underlying principle — that if governors like J.B.Pritzker in Illinois, Gavin Newsom at California, and our own Andrew Cuomo have an “unlimited, undated, blank check” from Washington, they face less of an incentive to curb their profligacy. Illinois and New York rank 49th and 44th among states who have laid aside funds for a “rainy day,” according to the Tax Foundation.

“When New York and Illinois start asking Washington for a bailout,” Mr. Stoll writes, “what they are really doing is asking taxpayers who live in better-managed states to pay their bills.” Asking small business owners, teachers, nurses, bus drivers, bartenders from other states to help dig Illinois out of its pre-coronavirus, self-inflicted, financial hellhole is, as the Tribune puts it, “astonishingly brazen.”

It will take a brazen president to confront this issue — and not only because, in its own way, America’s government is as fiscally unkempt as even Illinois’s. Nor are we suggesting the federal government has to drive every distressed state into bankruptcyWe’re not saying the federal government has to drive every distressed state into bankruptcy. It would, though, strike us as reasonable for the manager of the federal fisc — and the debts the federal government owes its central bank — to force the worst offenders to do their part before they get new money. It strikes us as a job made to order for Mr. Trump.

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Kuffar
Kuffar
3 years ago

The two most corrupt Dem hell holes in the nation and they have their fat hands out grubbing for taxpayer dollars.

TomSJr
TomSJr
3 years ago

NO! NO BAILOUTS TO ANY LIBERAL STATE THAT DISSED PRESIDENT TRUMP!

Steve
Steve
3 years ago

Taxpayers from other States should never pay the bills of another State. Simple. You broke it. You own it. Now it is up to the people that voted for the politicians of these defunct States to fix it.

mtman2
mtman2
3 years ago

Two govenor beggars with well paying jobs- should start by donating their salaries for life…!

Dustin John
Dustin John
3 years ago

The states rely on taxes from businesses. Democrats tax their people into poverty. Many have fled their taxes. They had a federal tax deduction for their own people so they could put the federal tax burden on Republican states. Now they want that money again. Dear Cuomo & Co. GFY!
https://liberalsbackwardsthink.com/2020/04/20/america-at-war-enemies-both-foreign-and-domestic/

notme123
notme123
3 years ago
Reply to  Dustin John

In Cuomo’s budget is $3B for “Restore Mother Nature” another waste.

notme123
notme123
3 years ago

NO! It’s the money of all the taxpayers in the US and should NOT be used to bail out any state, especially ones that squandered their money and were already almost bankrupt because of their reckless spending. NO! All states are suffering from the same loss of tax/income for the same reason. How dare they think they deserve more than others. Open up and Get the people back to work . And Harvard, GIVE that money back!

Andycane
Andycane
3 years ago

Bloody con artists! Cut their wings before they sink us all!

Public_Citizen
Public_Citizen
3 years ago

“There’s an alternative approach, though, that could be even more
constructive. Messrs. Trump and McConnell could use their newfound
financial leverage to demand policy reforms that would diminish the
long-term structural dysfunctionality of these states.”

You mean like this?:

We’re very soon going to be faced with these same political jurisdictions being forced into Bankruptcy, all because of their spendthrift ways over several decades.

The financial effects of the Covid-19 Virus and subsequent panic-driven shutdowns is just the final straw that tips the balance irrevocably over to the BK side. The Federal Government will have little choice but to backstop most of the debt involved, but it needs to have strings the size of mooring ropes attached.

Illinois is even closer to bankruptcy than California, which is barely ahead of New York in the race to the Bankruptcy Courts, something I have written about elsewhere.
They will soon be running to the federal government for a bailout, something I am opposed to but if it happens it needs to be under the following terms:
First, the entire state budget and all state funds need to be placed under a Federally Appointed CZAR, equivalent to the Court Appointed Receiver in a bankruptcy proceeding, who has plenipotentiary powers regarding all financial matters.

Second, during the period when the state is under the management of the Czar it shall be recognized by the Federal Government as a Territorial Possession of The United States for all matters dealing with the Federal Government but shall still be accorded the identifying title of “State of [fill in the blank]”. This means that the state looses all voting representation in The Congress and all Electoral Votes until it is restored to full responsibility for its own financial affairs, just like every other Territory. it may also loose access to certain federal programs that are intended for the various states but not for territorial possessions.

Third, all arrearages to any Pension Fund or any other fund that the state is a contributor to shall be brought current and maintained in that state for a period of one year and a day before financial control shall be restored to the state.

Fourth, the state must demonstrate ~full compliance~ with ~all~ Federal Statutes, Rules, Regulations, and Orders for a year and a day minimum.

Fifth, the state shall be bound to all of the above terms until the Czar certifies in writing that the state has fulfilled all requirements, that its financial affairs are in order, and the Czar has concluded all oversight.

The above requirements are not subject to modification or stay by any Inferior Court but may only be modified by a 2/3rds majority of the Justices of The Supreme Court of The United States of America

Any breach of the above shall result in the State of [fill in the blank] being reduced to the status of a Territorial Possession and the Duly Appointed/Elected Territorial Government must make reapplication for Statehood under the then existing terms and conditions, as specified by The Congress of The United States of America and The Executive Branch.
– – –

These may seem like harsh measures, but it is necessary for them to be this harsh in order to dissuade states from looking to the Federal Government as a remedy for their failure to act as responsible members of the Constitutional Compact that exists between the several states and as a strong incentive for them to remedy their bankruptcy in the shortest time possible.

Dee Bee
Dee Bee
3 years ago

Trump and McConnell could/should use their newfound financial leverage
to demand policy reforms that would diminish the long-term structural
dysfunctionality of these states. Obama Democrats put plenty of
conditions on expanded Medicaid funding. Bush teamed up with Kennedy to
make expanded federal education funding conditional on increased
accountability, testing, and transparency. The point is, there were
conditions. NY & California has highest taxes. NY is bankrupt
because Cuomo spends like a drunken sailor & badly mismanaged NYS.
He banned fracking,oil drilling,natural gas,fuel oil. NY is a sanctuary
state paying massive $ to illegals. Opinion: “THEY MADE THEIR BEDS, NOW LIE IN THE SLUM YOU CREATED.

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