But now numerous Republican senators seem to be increasingly gravitating toward a new $908 billion economic rescue package that is being negotiated by senators from both parties.
And one reason for this might be that some red states, too, are now facing serious fiscal crunches as the economic outlook darkens amid the surge of coronavirus that is only getting worse by the day.
Dare we refer to this as a call for Red State Bailouts?
No, we will not do this, because the whole idea is wretched, particularly when we’re facing what is obviously a deepening national disaster. The coronavirus is surging in dozens of states, both blue and red. Similarly, many states across the country, both red and blue, are facing serious revenue shortfalls that are related to the economic downturn.
But Republicans in particular had previously been reluctant to support anything close to this $900 billion amount. McConnell had been insisting on something much closer to $500 billion, without any aid to state and local governments, and some Republicans wanted to do even less.
Now the new compromise proposal includes $160 billion in aid to state and local governments to help them weather the next few months without cutting government workers or services. It also includes $288 billion in aid mostly to small businesses, and $180 billion in additional assistance to the unemployed that would give people an extra $300 per week. (That’s far less than Democrats had hoped, and infuriatingly, it also lacks direct cash payments to individuals.)
It turns out there is some overlap between the Republicans who are moving toward this proposal and the states that are facing fiscal crunches. These crunches are occurring mainly because the pandemic-driven pullback in economic activity results in increasing joblessness and declining consumption, which means less in sales and income tax revenue.
Among the red (or reddish) states that are now facing steep revenue declines are Alaska, North Dakota, Louisiana, Iowa, Florida and Wyoming, as Patricia Cohen of the New York Times reports. Others include North Carolina.
Among the Republican senators now backing the compromise or leaning towards it are Lisa Murkowski (Alaska), Kevin Cramer (N.D.), Bill Cassidy (La.), Chuck Grassley and Joni Ernst (Iowa), Marco Rubio (Fla.) and Thom Tillis (N.C.).
Though we can’t be sure these things are connected, you can see some overlap there. At the very least, more Republican senators are joining with Democrats to acknowledge that this is a problem confronting all of us.
“The pandemic is not partisan,” Michael Leachman, vice president of state fiscal policy at the Center on Budget and Policy Priorities, told me. “The virus doesn’t care if a state is led by Republicans or Democrats. It hurts the economy of every state.”
“States run by Republicans have some of the worst shortfalls,” Leachman added. “Legislatures in states are coming back into session soon, and they’re going to have to start laying more people off and cutting back on services that people need.”
“If I were a governor or mayor in one of these states, I would be telling my member of Congress that it’s time to deliver fiscal aid,” Leachman concluded.
Another reason this might be happening now is that the election is over, and President Trump lost. As you may recall, his reelection message for months was that his stupendous leadership had crushed the pandemic and that we were roaring back to rebuilding the greatest economy in the known universe.
That constrained many Republicans from even admitting there was a problem. But now they’re a bit freer to do so, which, along with the surging pandemic, may be leaving them with little alternative but to do something. If this compromise pans out, it will be far from enough, of course. But Trump’s ouster may also pave the way for something much bigger next year, and doing something now is far, far better than nothing.