What They’re Saying: No State Bailouts

Press Releases · Apr 29, 2020

April 29, 2020

Congress is reportedly considering bailing out state and local governments to the tune of $500 billion or more. Heritage Action opposes wasteful bailouts — these state bailouts would waste taxpayer money while rewarding mismanaged states at the expense of responsible ones.

Many elected officials and conservative leaders have joined the opposition. Here are the most prominent voices speaking out against state and local bailouts:

President Trump: “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?”

President Trump: "We're not looking to do a bailout for a state. It's unfair to many of the states, most of the states that have done such a good job.”

Senate Majority Leader Mitch McConnell: “We’re not ready to just send a blank check down to states and local governments to spend any way they choose to.”

Leader McConnell: “This whole business of additional assistance for state and local governments need to be thoroughly evaluated. You raised yourself the important issue of what states have done, many of them have done to themselves with their pension programs. There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.”

Senator Rick Scott: “American families make responsible budgetary decisions every day. Well-managed states like Florida have done it for years. It’s time for New York, Illinois and California to do the same.”

Peter Navarro: “They forget there are 49 other states in the union here that also need some help... I can't reach into my magic bag and throw a bunch of money at NY right now.”

Nikki Haley: “A 5th aid package should not bail out states that have recklessly spent and taxed their way into oblivion. Illinois lawmakers are seeking tens of billions in taxpayer funds to deal with the state’s looming pension debt – that has nothing at all to do with the COVID-19 pandemic.”

Rep. Kevin Brady: “Let me fact check the absurd claim Congress has left state and local governments behind. We fund one third of state budgets year to year. We’ve already given $150 billion dollars in direct aid to state and local governments — some Democratic governors haven’t even sent it down to their local communities. $260 billion in state unemployment. $100 billion for state and local hospitals and healthcare. $45 billion for state and local disaster aid. $30 billion for state and local schools colleges. $25 billion for state and local mass transit, and more Medicaid money for our state and local governments. That claim is simply absurd.”

Wall Street Journal: “The question to ask is why taxpayers in Appleton and Sarasota should rescue politicians and unions in Albany and Springfield?”

Rep. Chip Roy: “We need local governments and state governments to get the hell out of the way of the American citizen and give their country back to them. And I’m not interested in any federal bailouts of state and local government, at least until we have free, open commerce, free flowing in the states in question.”

Senator Thom Tillis: “I’m not so sure taxpayer dollars from North Carolina should go to a state, a county, or a city that, like you said, was in poor economic shape before we even had the virus.”

Senator Jerry Moran: “I don’t want Kansas taxpayers bailing out states that have made poor fiscal decisions, living beyond their means”

Missouri Gov. Mike Parson: “You can only spend what you have. You can’t spend more. Other states need to focus on that same responsibility. It’s not right for them to get bailed out and other states like Missouri that does it right ends up bailing other states out. That’s not what the federal government should be doing.”

Rep. Ron Estes: “The federal government should not replace lost state revenue. Sending the same taxpayer dollar to Washington first just to send it back to the state to fill a hole in the state budget isn’t logical. All that does is allow federal politicians to take credit for the funding.”

Senator Josh Hawley: “This can’t be an exercise in letting Nancy Pelosi and Chuck Schumer send blank checks to California and New York, and our neighbor Illinois, at the expense of states like Missouri.”

House Minority Whip Steve Scalise: “[New York] had a multi-billion dollar deficit before the outbreak. Now they’re calling on Congress to bail them out. Cuomo just got $7.5 billion and he hasn’t even figured out how to spend it, and he’s calling on Congress for more money… this isn’t the time to just go and demand everything to solve the problems you had before the outbreak.”

Reps. Lahood, Bost, Davis, Shimkus, and Kinzinger: “The promises made in the past, and still today, are inhibiting Illinois’ growth and prosperity for the future. Even in the best economic climate, with some of the highest taxes in the nation, Illinois could not afford its obligations. This pandemic has not caused a pension crisis, it has further illuminated the one that already existed.”

Hoover Institution: “The idea that all states should come through a downturn without any pain, and without sharing that pain with investors who profited handsomely by taking risks, is grossly unfair to taxpayers and investors that behaved more responsibly.”

Mackinac Center: “Michigan’s decade-long recession and recovery proves that states are capable of weathering the storm without turning to Washington to bail them out. While bankruptcy should never be a first choice, Detroit demonstrated that it can be a tool governments use to begin to right the ship. Our state was better prepared for this latest crisis because we were practiced at fixing our own problems.”

Illinois Policy Institute: “Without these changes, a bailout of mismanaged states would unfairly punish states that have been more fiscally responsible. Bailouts without reform will also encourage more mismanagement in other states, since there is little incentive for fiscal responsibility if Congress can be expected to shield elected officials from the consequences of their actions.”

Empire Center: “Congress shouldn’t feel compelled to subsidize what any state or local government “normally” does. New York’s budgetary “normal” would include funding $360 million a year in scheduled increases for unionized state-government employees, plus school aid to help underwrite more than $400 million in raises for teachers and other school-district employees outside the Big Apple… Doling out federal aid to states and localities with no strings attached — as Senate Democrats just proposed — would only perpetuate unsustainable spending habits.”

The Heritage Foundation: “The fact is, no state or local government will need to declare bankruptcy just because of COVID-19. Rather, if states or municipalities do face insolvency, it will be the result of decades of fiscal mismanagement.”

Heritage Action: “Households across America are going through an unprecedented health and economic crisis, struggling to stay healthy and secure. But Governor Cuomo, and other governors, see an opportunity to bail out their state budgets, and public sector unions see an opportunity to fund their political war chests. Why would Republicans go along with that? They shouldn’t.”