Sen. Ted Cruz (R-TX) said the next coronavirus relief stimulus bill is going to be a “major issue” in the senate if it focuses on a bailout for “fiscal irresponsibility and fiscally reckless policies” states.
“I don’t see any reason why the people of Texas should have to pay higher taxes to bail out states that have been irresponsible, so I think that is going to be a major issue to a disagreement in the Senate,” Cruz said in an interview with CNBC’s Squawk Box Wednesday morning. “If we’re focused on dealing with the coronavirus crisis that’s fine, but it shouldn’t be an excuse to bail out states for fiscal irresponsibility and fiscally reckless policies that long proceeded the coronavirus pandemic.”
Cruz specially cited the “Illinois unfunded pension liability” that has a $241 billion pension debt, the highest in the nation that he said was caused by Democrat politicians “who were just buying votes.”
“There is a reasonable case to be made for greater flexibility for the money we have already sent to the states and local governments,” Cruz added.
House Speaker Nancy Pelosi and House Democrats are planning to unveil an enormous CARES 2 package within the next few days, and preparing to vote on the unveiled bill in a floor vote as soon as next week. The fourth stimulus relief is set to focus on providing a hundreds of billions in federal bailout for struggling state and local governments that
The bailout cost, according to the speaker, would be “equivalent” to the same amount Congress has allocated into the Paycheck Protection Program to aid struggling businesses that were forced to shut down due to the coronavirus outbreak.
“There will be a bill, and it will be expensive,” Pelosi told reporters last month after the House cleared a $484 billion stimulus measure. “There will not be a bill without state and local funding … and is probably a number equivalent of what we’ve done for small businesses.”
She also accused Senate Majority Leader Mitch McConnell (R-KY) and Republicans of “rejecting governance” while arguing that local governments will be forced to cut back on firefighters, police, and other essential government workers if they do not receive federal aid.
“The president is asking people to inject Lysol into their lungs, and Mitch is saying that states should go bankrupt,” Pelosi said, using President Trump widely ridiculed remark on disinfectants. “It’s a clear, visible, within 24 hours, of how the Republicans reject science and reject governance. If you don’t believe in science and you don’t believe in governance, that’s their approach.”
McConnell suggested late last month that states facing mounting budget constraints should declare bankruptcy, saying that Republicans are not interested in “revenue replacement for state governments” or “solving their pension problems.” His comments prompted blowback from state governors and fellow lawmakers.
“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 said. “You raised yourself the important issue of what states have done, many of them have done to themselves with their pension programs.”
Cruz’s comments echoed other Republican lawmakers who believe providing substantial aid would be a bailout for heavily indebted Democratic states that predate the pandemic.
Last week, Sen. Rick Scott (R-FL) slammed the Democrats bailout proposal, which is expected to cost about a trillion dollars, saying it is not right for Florida “taxpayers to bail out indebted states, such as New York, Illinois, and California.”
“It’s not fair to the taxpayers of Florida. We sit here, we live within our means, and then New York, Illinois, California, and other states don’t. And we’re supposed to go bail them out? That’s not right,” Scott told reporters. “I get it, we should help states with the coronavirus … [but] the federal government doesn’t pay for everything. And states have an obligation, cities have an obligation to balance their budgets and watch how they spend money, too.”
President Trump has also criticized the proposals from Democrats to aid “poorly run states.”
Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking?
— Donald J. Trump (@realDonaldTrump) April 27, 2020