President Trump and congressional Republicans are going to war with the states.
Last week, the $349 billion allotted for small businesses in the CARES Act rescue package ran out, with only a portion of the American businesses that have suffered in this pandemic-driven recession getting the help they need. While everyone seemed ready to provide more money, we found ourselves in a familiar situation, with Democrats saying we need to be swift and aggressive in saving Americans suffering from this economic catastrophe, and Republicans saying that we shouldn’t spend too much or help too many people.
When negotiations began, Republicans wanted to add about $250 billion to the small business fund — and do nothing else. Now it appears that Democrats have pressured them into accepting a package that sends $370 billion to small businesses, gives $75 billion to hospitals, and spends $25 billion to beef up coronavirus testing.
What isn’t included in the package, however, is the desperately needed aid to states and cities Democrats sought. Republicans absolutely refused to even consider it.
Why? The need is urgent. State and local budgets are suddenly facing all kinds of new costs related to the pandemic, while at the same time tax revenues have fallen off a cliff. If they don’t get help, they’ll have to start laying people off and slashing state services, which will only make the recession deeper and longer. By some estimates, states and cities will need $500 billion in federal aid to make up the shortfall.
These things are already happening. Los Angeles Mayor Eric Garcetti just announced that the city will have to furlough city workers, giving them the equivalent of a 10 percent cut in pay. Similar crises are happening in Colorado and Ohio and Hawaii and Maryland and Oklahoma and Missouri and New York and Texas and pretty much every other state, where governors, county officials, and mayors are bracing for severe budget shortfalls that will lead to cutbacks and layoffs.
“Nearly every American city is seeing a precipitous drop in revenue,” the United States Conference of Mayors says. "Without federal support, many will be forced to lay off employees and make cuts that will hurt public safety.” The National Governors Association has been sending the same message.
It is affecting red states and blue states, cities and rural areas, anyone and everyone. And you’d think that even if they’re indifferent to human suffering, Republicans should at least see it as in their political interest to help. After all, the worse the recession is, the less likely it is that Trump will be reelected and that Republicans will hold on to the Senate.
So why is it that Democrats have to beg and plead for aid to states and cities, while Republicans resist?
One explanation has it that Republicans are motivated only by their principled fiscal probity (go ahead and laugh). The New York Times reports that they object to the fact that “Democrats have pushed for unrestricted funds, not related to the coronavirus, that would effectively subsidize bad fiscal decisions that occurred before the pandemic.”
That is simply absurd, since the whole point of this aid is that the pandemic has created a cascade of financial effects that are eviscerating state budgets, far beyond the direct costs of treating people with covid-19, no matter how those budgets were structured before.
There’s another explanation for Republican recalcitrance. As Axios reports:
The thinking among some Trump administration officials is that many states should be reopening their governments soon and that additional funding could deter them from doing so.
Politico reports the same thing:
The White House and Trump administration have been holding out because, in part, they believe if Congress keeps cutting checks for state and local governments, they will be disincentivized to open up their economies.
That is, in a word, bonkers. It’s as though they think state governors (of whom there are 26 Republicans and 24 Democrats) are keeping lockdown orders in place only because they and their citizens haven’t been forced to endure enough economic pain; let them suffer a little more, and out of desperation they’ll lift the orders even if public health concerns dictate otherwise.
Like everything else, this likely comes back to Trump himself. In his desperation to blame anyone and everyone else for his own failures, he has decided that states and governors are the problem: They aren’t being nice enough to him; they are dismissive when he says he "calls the shots”; they aren’t doing enough testing.
So he and congressional Republicans have decided that states are just like undeserving poor people who must be punished to do the right thing. In this case, the right thing is lifting lockdown orders as soon as possible. Just as Republicans worried that the tens of millions of newly unemployed people might grow lazy and slothful if the government helped them pay their bills for a few months, now they worry that the same will happen to states.
So Republicans have decided on a strategy of extortion: You don’t get help unless you lift your stay-at-home orders; then maybe we’ll talk. That’s not what’s best for public health and your economic situation? It’ll lead to more infections, more deaths, and a longer recession? Too bad. It’s what Trump wants, and that’s all that matters.