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New York Gov. Andrew Cuomo on Thursday hammered Senate Majority Leader Mitch McConnell’s suggestion for states to declare bankruptcy amid the fiscal fallout from the coronavirus pandemic, calling it “one of the really dumb ideas of all time.”
The Democratic governor, during a press conference Thursday, addressed McConnell’s suggestion a day earlier that state governments be eligible to file for bankruptcy due to the coronavirus crisis.
“We’ve been talking about funding for state and local governments, and it was not in the bill that the House is going to pass today. They said, 'Don’t worry, don’t worry, don’t worry — the next bill,’” Cuomo said. “As soon as the Senate passed it – this current bill – Sen. Mitch McConnell goes out and he says, maybe the states should declare bankruptcy. OK.”
Cuomo was referring to the nearly $500 billion Senate-passed bill, now before the House, to boost funding for small businesses and other programs. Lawmakers did not include money for state and local governments in the package, though the previously passed CARES Act had $150 billion for those governments. Still, Cuomo and other governors are pressing Congress for more — only to be rebuffed by the Senate GOP leader.
“Not to fund state and local governments is incredibly shortsighted,” Cuomo said. “They want to fund small businesses, fund the airlines—I understand that. But state and local governments fund police and fire and teachers and schools.”
He added: “It makes no sense to me.” Cuomo went on to call it “irresponsible” and “reckless.”
Cuomo also tweeted: “One of the really dumb ideas of all time just came from Sen. Mitch McConnell. His suggestion to let states go bankrupt makes no sense. He says he doesn’t want a ‘Blue State Bailout.’ 15,000 people died—this is not the time for politics.”
Cuomo, during the press conference, went on to say that McConnell, as a “federal legislator,” is “distributing the federal pot of money.”
“New York puts in more money into the federal pot than it takes out. His state takes out more than it puts in,” Cuomo said. “Sen. McConnell, who's getting bailed out here? It's your state that is living on the money that we generate. Your state is getting bailed out. Not my state.”
Cuomo tweeted, minutes later, that New York State puts “$116 billion more into the federal pot than we take out.”
“Kentucky TAKES $148 billion more from the federal pot than they put in,” Cuomo continued, questioning whether McConnell is against sending money because New York is a "blue" state. “But we don’t deserve help now because the 15,000 people who died here were predominantly Democrats?”
Cuomo’s comments come after McConnell said Wednesday on “The Hugh Hewitt Show” he “would certainly be in favor of allowing states to use "the bankruptcy route” rather than sending governors more federal money to deal with their states’ deficits.
"I mean, we all represent states. We all have governors regardless of party who would love to have free money," McConnell said in response to a question on what the federal government should do to help states in tricky financial situations. "And that’s why 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 need[s] to be thoroughly evaluated.”
McConnell then mentioned that many states are struggling with funding pensions or similar programs, saying "[t]here's not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.”
After Hewett weighed in, criticizing liberal states that racked up significant liabilities, McConnell said he favored letting states declare bankruptcy, as local governments are allowed to.
"Yeah, I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities," McConnell said. "And there’s no good reason for it not to be available.”
McConnell's comments came after the Senate advanced an interim stimulus package to restock funds in the Paycheck Protection Program (PPP) and address a handful of other priorities.
He initially sought to have the bill include only funding for the PPP but Democrats held up the legislation until they could extract concessions from the majority leader. Though McConnell ceded to some of their requests, he kept funding for state governments out of the bill, which is expected to see a vote in the House of Representatives on Thursday.
On Thursday, Cuomo said it was "vicious" for McConnell to suggest that "this is a blue state bailout."
"What he is saying is, if you look at states with coronavirus problems they tend to be Democratic states," Cuomo said, noting New York, California, Michigan and Illinois. He added: "Don't help New York state because it is a Democratic state. How ugly a thought."
The state of New York has become the epicenter of the coronavirus pandemic in the U.S., reporting more than a quarter of a million positive cases of COVID-19 as of Thursday and more than 15,000 deaths.
Fox News' Tyler Olson contributed to this report.