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More DC gaslighting on state aid

Friday, Sep 11, 2020

* Here we go again

Democratic governors on Thursday begged Congress to come to the aid of ailing states, which face unexpected expenses as they attempt to curb the spread of COVID-19 as well as massive revenue shortfalls due to the pandemic.

But Republicans at a House hearing rejected their pleas, arguing that states have yet to spend money provided by Congress earlier this year, and prospects appeared to dim for any kind of deal on additional emergency aid before the election. […]

Republicans have characterized such aid as a “blue state bailout” and denied the need for additional money — a point [Rep. Patrick McHenry of North Carolina] made again Thursday. He pointed to a recent report by the Congressional Research Service that found that roughly 25% of the $150 billion approved in March had been spent as of June 30.

“Democrats are using this hearing to claim that states are struggling,” he said, “but it certainly isn’t due to a lack of funding.”

The states (and local governments, for that matter) haven’t been able to spend all the money because of the way Congress drafted the bill. The law explicitly forbids the federal cash from being used to plug revenue holes caused by the international economic crash. It can only be used for unexpected costs.

Reporters have constantly fallen for this gross misdirection, including in Illinois. As Charlie Wheeler used to tell cub reporters: Always read the bill.

Also, June 30th was the end of the fiscal year for lots of states. Just more DC gaslighting.

- Posted by Rich Miller        

11 Comments »
  1. - Fixer - Friday, Sep 11, 20 @ 10:37 am:

    It reminds me of the Eastern Bloc here screaming that Chicago is getting bailed out by downstate. Maybe blue states should consider pointing out how much the send to the federal government compared to red states.


  2. - Oswego Willy - Friday, Sep 11, 20 @ 10:39 am:

    This is, in the literal sense, defunding, not only police, fire, but defunding the ability of states to function as the White House has hoped; let the locals handle the pandemic.

    Well, how’s that going?

    Here’s the fiscal abandonment of local and state governments, but framed as “Democrat states and cities”… that ironically are also McConnell’s Kentucky in those states.

    This gaslighting for political division will need to heal as much as anything in a new beginning.


  3. - JS Mill - Friday, Sep 11, 20 @ 10:50 am:

    =Republicans have characterized such aid as a “blue state bailout” =

    First, Rich is correct on the gaslighting.

    Second, who shows up time after time when the coastal areas experience yet another Hurricane? FEMA. Yet we continue to subsidize or flat out pay for the rebuilding of those same areas that are hit again.

    My point is, everyone gets some kind of subsidy in one way or another. Some in the GOP/Red state areas just lack any self awareness.

    I am tired of the blue state bail out shtick.

    Didn’t we just add trillions to the national debt under a republican administration and senate? Didn’t we had, potentially a trillion, to the debt when the executive and both houses of congress were GOP controlled? What kind of fiscal management is that?

    Glass houses.


  4. - Still Waiting - Friday, Sep 11, 20 @ 11:42 am:

    Here’s one good example of why so much of the money remained “unspent” as of June 30th. I wrote the grant for my organization last spring as soon as it was available and had it approved right away. I ordered all of my grant items before the end of June, but they were on backorder for 3 months. I can’t pay the bill for the items until the items actually arrive and are in our possession. I can’t get the grant money for these purchases until the bill is paid. I submitted my state expenditure report to show the thousands of dollars obligated, but the state won’t actually send money until after the bill is paid. So while I’ve already “spent” my whole allotment of grant funds, I haven’t received a dime of actual revenue yet, so it’s still just sitting in the state’s account. Hopefully that will change for us next month. This process is all completely normal for federal grants.


  5. - thoughts matter - Friday, Sep 11, 20 @ 11:48 am:

    Those states they are belittling are some of the most populated US states. Regardless of what party their governors belong to, those states are populated by tens of millions of US citizens. Citizens that deserve and need this aid. I’m disgusted by partisan bickering and the attitude that half the country doesn’t matter.
    Maybe it’s time we quit having separate primaries by party. If we had one joint primary and sent the two candidates that got the most primary votes to the general election, we might get people who cared about the USA as a whole.


  6. - Just Sayin ... - Friday, Sep 11, 20 @ 11:51 am:

    What about the “Red State Bailout” where those states get 60-70% of Medicaid reimbursements compared to the Blue state’s 50-55%? You don’t hear Mitch McConnell talk about how Kentucky gets 72% in FMAP. The fact is that the Blue states have been subsidizing the Red states for years. Federal support is needed for the loss of state revenues due to COVID-19.


  7. - illinifan - Friday, Sep 11, 20 @ 12:09 pm:

    Wish we could say that we won’t send the Feds the tax money we send for the Red State bailout and just call it even. What could they do, sue us? We will just add them to the states tab.


  8. - whatmacallit - Friday, Sep 11, 20 @ 12:40 pm:

    Why should the federal government, i.e. taxpayers, bail Illinois out of their pension debt and other reckless spending debt?


  9. - Oswego Willy - Friday, Sep 11, 20 @ 12:45 pm:

    === Why should the federal government, i.e. taxpayers, bail Illinois out of their pension debt and other reckless spending debt?===

    Wear that mask when mouth breathing like that. Think of others.

    Yeah, here’s the sitch;

    States like NY, IL… we send more money to the coffers if the federal government then they send back.

    Your dorm room thinking allows “oh yeah, well, we’ll stop giving money to DC” silly too.

    If you want to defund the police, the best way is to be against federal assistance to states.

    Are you for defunding the police?


  10. - Lester Holt’s Mustache - Friday, Sep 11, 20 @ 1:09 pm:

    == Why should the federal government, i.e. taxpayers, bail Illinois out ==

    Why do you hate Illinois police and fire departments? Blue lives don’t matter to you?


  11. - dbk - Friday, Sep 11, 20 @ 1:18 pm:

    Since it looks like there will be no coronavirus relief bill passed before the election, all the posturing by both parties is pretty much performative (i.e. gaslighting) now.

    A couple of points:

    (1) Of that $150 billion for states/municipalities earmarked in the CARES Act, while it is true that only 25% has been spent, 75% has been committed, leaving a total of $37.5 billion remaining to be divided up among the 50 states, DC, and thhe territories. That’s not going to go far.
    https://www.crfb.org/blogs/how-much-have-states-spent-coronavirus-relief-fund

    (2) It is estimated (based on CBO figures and Fed Reserve projections) that the shortfall for all states will be $555 billion 2020-2022.
    https://www.cbpp.org/research/state-budget-and-tax/states-continue-to-face-large-shortfalls-due-to-covid-19-effects

    None of these projections include $$ to cover structural deficits; they would go to meet current revenue deficits.

    I don’t know why this isn’t getting the attention it deserves outside of economic circles, but it seems to me that every single state is looking into a financial abyss over the next 2 years.


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