Understand that for Kentucky, the Heroes Act means “direct aid to Kentucky’s budget of $3.3 billion in federal fiscal year (FFY) 2020 and an additional $4.1 billion in FFY 2021 for a total of $7.4 billion,” according to the Kentucky Center for Economic Policy. The state would also benefit from the reduction in the state’s share of Medicaid spending, saving $1.7 billion over 18 months. Finally, “In Kentucky, all 120 counties would receive a total of $2.5 billion, and 429 cities and other local government entities would receive $1.9 billion over two years.” Without federal aid, the governor and legislature are contemplating more than $450 million in cuts in “state services, including education, health care and public safety.” That means more cuts and more layoffs.
Refusing to help keep state and local first responders on payroll makes little political sense. McConnell’s stalling and skimping makes even less economic sense. As Michael Leachman of the Center for Budget and Policy Priorities explains, “States must balance their budgets every year, even in recessions. Without substantial federal help during this crisis, they very likely will deeply cut areas such as education and health care, lay off teachers and other workers in large numbers, and cancel contracts with many businesses. (States and localities furloughed or laid off nearly a million workers in April alone.)” Leachman continues: “That would worsen the recession, delay the recovery, and further harm families and communities. State and local cuts in health care also could shortchange coronavirus response efforts. The large shortfalls could lead states and localities to raise taxes and fees as well.” The Congressional Budget Office already expects nearly 16 percent unemployment in the third quarter. But should McConnell have his druthers and kill any further stimulus, the result will be “extensive layoffs of teachers, health care workers, and first responders, which would further weaken an already weak economy,” Leachman added.
New York Gov. Andrew M. Cuomo (D) will be visiting with President Trump on Wednesday. He might reiterate the message he delivered at his Tuesday news conference: “With no money from the federal government, schools get cut 20 percent, local government gets cut 20 percent and hospitals get 20 percent. … If you want to cut schools 20 percent, then don’t fund New York. If you want to cut police and fire 20 percent, then don’t fund New York. If you want to cut our hospitals 20 percent, don’t fund New York.” Or Kentucky or any other state.
Take a look at the cuts envisioned in critical swing states if no federal aid is forthcoming. In Ohio, the Columbus CBS affiliate reports that “COVID-19 has taken a wrecking ball to Ohio’s economy. The state went from running $200 million ahead in revenue estimates in February to the nearly three-quarter billion drop last month.” The Republican governor is now proposing $775 million in cuts. For Michigan (the state Trump threatened to punish with loss of aid if it sent out absentee ballot applications), the state is staring at a budget shortfall of $2.6 billion this year and $1 billion next year. That’s a lot of police officers, teachers, hospital employees and firefighters. Arizona? A $1.1 billion shortfall. Pennsylvania? Nearly $5 billion in lost revenue.
It is mind-boggling that the White House has yet to grab McConnell by the lapels and holler at him to get going. Every week he waits, more layoffs follow, the recession worsens and the Republicans’ chances of losing the House, Senate and White House grow.