The Senate majority leader made clear that he does not want to see any more aid to states and localities from this point on. Instead, he believes that they should simply be forced to declare bankruptcy. He said:
My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that [declare bankruptcy]. That’s not something I’m going to be in favor of....We all have governors regardless of party who would love to have free money. 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 to be thoroughly evaluated.
Meanwhile, his office is calling aid to states “Blue State Bailouts” — as though it’s only states with lots of Democrats that need help to avoid having to lay off teachers and cops, and not every state in the Union.
The twin public health and economic crises have put state budgets in a desperate condition. If something isn’t done soon, those budgets are going to collapse, resulting in massive layoffs and cuts in services (as of 2014, there were more than 16 million state and local full-time-equivalent employees in America). Which, of course, will make the recession deeper and longer.
While Phase 3 of the rescue effort included $150 billion for states and localities, it wasn’t nearly enough. In the negotiations over Phase 4, Democrats requested an additional $150 billion, but even that represented a fraction of the need. According to experts and groups like the National Governors Association, states actually need more like $500 billion to stay afloat.
As those negotiations proceeded, the position of the Trump White House came down to, “We’ll get to that later.” According to some reporting, they were privately worried that giving the states aid too soon would discourage them from quickly reopening businesses and schools; better to use some more economic pain as a way to incentivize them to lift stay-at-home orders, regardless of what public health might dictate.
But McConnell didn’t say he might favor state and local aid some time in the future. He simply said no, so there was no state aid in Phase 4. And now it’s becoming clear that “No” really meant “Never.”
In any negotiation, the party that is more willing to walk away has most of the power. If you desperately want to arrive at an agreement but I don’t really care one way or another, you’re going to be much more willing to accept my terms.
We’ve seen that play out in negotiations over the successive phases of economic rescue since the covid-19 pandemic began — except with an inversion of what one might expect. Since the president is likely to get most of the blame (deserved or not) for an economic downturn, and since President Trump is up for reelection this fall, Republicans should be the ones demanding the most aggressive measures to confront the pandemic and save the economy.
Yet the opposite has been true: Democrats have asked for more at every step than Republicans have been willing to give, to the point where in Phase 4, the inclusion of $25 billion for coronavirus testing — the single most important thing that will allow us to end the pandemic — was treated by everyone as a concession Republicans made to Democrats.
But even if his public rejection of state aid were just a negotiating tactic on McConnell’s part, the natural question is: To what end? What would making everyone think he’s willing to turn a recession into a depression achieve for McConnell? What is he trying to get out of the next deal that he can’t otherwise get? Less money for small businesses? Less help for the unemployed?
Rep. John Yarmuth (D-Ky.), who has known McConnell for half a century, recently told the New Yorker’s Jane Mayer that McConnell “never had any core principles. He just wants to be something. He doesn’t want to do anything.”
Maybe McConnell secretly has some end game in mind, one that will suddenly reveal that he was serving the best interests of all Americans the whole time. But right now, it sure looks like he just wants the country to burn.