President Donald Trump on Thursday did not embrace a proposal to provide direct relief to state and local governments, noting it was mostly Democratic-led states that are facing the most dire financial problems due to the pandemic.
At the same time, Trump did not completely rule out allowing states to declare bankruptcy protection, which Senate Majority Leader Mitch McConnell has called an option for state governments and is currently illegal.
“So what’s happening is the Democrats have come to us and they’d like to do a phase four and we’ll think about what’s happening,” Trump said during a news conference. “They want to help the states, they want to help bailouts and bailouts are very tough and they happen to be Democrat states. It’s California, it’s New York, it’s Illinois. You start with those three and the Republican states are in strong shape. I don’t know. Is that luck or is that talent or is it just a different mentality?”
The call for state relief is a bipartisan one: Republican Governor Larry Hogan of Maryland, the head of the National Governors Association, has backed a $500 billion relief package to states whose finances have been swamped by the pandemic.
Governor Andrew Cuomo, too, has cautioned against a partisan response to the crisis.
A “phase four” relief package is being discussed in Congress as a potential measure to aid states as tax revenue has largely disintegrated over the last six weeks.
McConnell’s suggestion that state governments can declare bankruptcy was met with scorn by Cuomo, who called it “a really dumb idea.”
Trump on Thursday, however, remained circumspect.
“It’s an idea that he has,” Trump said of McConnell’s bankruptcy statement. “He threw that out as an idea. I’ve spoken to him about it very strongly and we’re going to see what happens. We’ll take a little bit of a pause. We’ll see what happens.”
Cuomo and Trump have talked — and occasionally feuded — during the pandemic. Largely Cuomo has been complimentary of the federal government’s response.
But the state aid issue remains a top one for the governor as New York faces potential cuts this month to education and health care spending.
It’s estimated New York has lost more than $10 billion in revenue and could have budget gaps of more than $60 billion combined in the coming fiscal years.