It’s just a bill
Thursday, Sep 24, 2020 - Posted by Rich Miller
* Illinois Policy Institute…
U.S. Rep. Darin LaHood, the Republican representative from Illinois’ 18th Congressional District, introduced the Taxpayer Protection Act in the U.S. House of Representatives on Sept. 24. The bill would create a “Taxpayer Protection Program” to prevent blank-check bailouts of state and local governments.
Similar to the Paycheck Protection Program — which required businesses to use the funds to maintain their workforce in order to receive forgiveness on federal loans— the Taxpayer Protection Program authorizes state and local governments to seek forgivable loans from the federal government, with loan forgiveness available only to states with sound pensions, truly balanced budgets and sufficient rainy-day funds. Both programs implement basic financial safeguards to ensure federal aid is used to support those in need.
States with unsustainable pension debt and a history of fiscal mismanagement would be required to implement reforms to protect their residents and ensure federal money achieves its intended purpose of supporting essential government services during the COVID-19 pandemic.
The requirements for loan forgiveness are:
1. Sound pensions: States and counties with populations of 500,000 or more and local governments with populations of 250,000 or more must be able to eliminate 100% of pension debt over no more than 25 years, using best practices for funding schedules and realistic accounting assumptions. States such as Illinois and New Jersey with unsustainable levels of pension debt must reduce pension debt to the level they can truly afford, without increasing taxpayer costs.
2. Truly balanced budgets: States would be required to have a constitutional or statutory requirement for “end of year” balanced budgets. Only actual revenue, such as from taxes and fees, would count toward the balancing requirement. States would not be able to count borrowing or money swept from other government accounts toward the requirement, preventing the budget gimmicks that have allowed Illinois politicians to avoid balancing the budget for 20 years.
3. Sufficient rainy-day funds: States would be required to save for emergencies and recessions on their own going forward, holding 5-10% of their annual revenue in a rainy-day fund. Rainy-day funds allow states to cover revenue shortfalls without resorting to essential service cuts or tax hikes. The average state held 8% of its budget in reserve before the COVID-19 pandemic, but Illinois had virtually nothing saved.
The bill prohibits states from using federal money to bail out legacy debt and deficits that are unrelated to the COVID-19 pandemic. The bill also guarantees no state or local government would receive more revenue than they actually lost as a result of the pandemic, limiting quarterly payments to the difference between current own-source revenue collections and collections during the same period in fiscal year 2019. It allows for up to $186 billion in federal and state aid, with $100 billion for states, $75 billion for local governments, $8 billion for tribal governments and $3 billion for the District of Columbia and U.S. territories.
States that fail to achieve the conditions for sound finances will need to repay the loans with an interest rate that goes up as a state’s credit rating goes down. Illinois, which holds the worst credit rating in the nation, would face a “spread” or interest rate penalty of 3.3% compared to 1% for top-rated states.
On Sept. 16, Illinois Gov. J.B. Pritzker wrote a letter to members of Illinois’ Congressional delegation urging them “to come together in a bipartisan fashion to provide critical support to states and local governments facing disastrous budgetary consequences stemming from unanticipated revenue losses due to the COVID-19 pandemic.”
- Oswego Willy - Thursday, Sep 24, 20 @ 9:28 am:
LaHood is NOT his father, part 5,396.
- Friendly Bob Adams - Thursday, Sep 24, 20 @ 9:33 am:
Not sure who is supposed to be impressed by this announcement of a bill that has zero chance of being passed.
Interesting that LaHood is taking a position that will punish his own state and the residents of his own district. But that’s not news, either.
- Chambanalyst - Thursday, Sep 24, 20 @ 9:34 am:
Not a fan of the way Illinois has ended up in the situation we’re in, but I wish voters could see this for what it is: a do-nothing bill that serves only as a vessel for Darin to pat himself on the back and say, “Look, I’m doing things to fix this.”
- Annonin' - Thursday, Sep 24, 20 @ 9:40 am:
It is amazing the IL #1 Empty Suit waits until the end of Sept to push this scam. Not much to worry about this because ES has not passed a bill while in Congress. Meanwhile can someone as ES what his plan is?
- Grandson of Man - Thursday, Sep 24, 20 @ 9:41 am:
“Program authorizes state and local governments to seek forgivable loans from the federal government, with loan forgiveness available only to states with sound pensions, truly balanced budgets and sufficient rainy-day funds.”
Pretty rich of a Republican trying to punish states for their fiscal problems when the federal deficit exploded to $3 trillion and national debt has grown faster under Trump and the his party than under Obama.
Where are you, Illinois exodus pushers and professional Illinois attackers, to condemn the horrendous fiscal performance of the GOP that almost makes Illinois’ problems look child-like?
- Michelle Flaherty - Thursday, Sep 24, 20 @ 9:43 am:
Just move to Indiana already Darin. You’ve stripmined just about everything you can out of your family’s once-proud hometown.
- Not a Superstar - Thursday, Sep 24, 20 @ 9:43 am:
LaHood is trying to revive Raunerism, this time for the whole country. Because it worked so well the first time.
- Former Downstater - Thursday, Sep 24, 20 @ 9:44 am:
When does he introduce a bill to help Illinois get more of it’s share in taxes back? I’m tired of being a donor state.
- Oswego Willy - Thursday, Sep 24, 20 @ 9:44 am:
In short,
The LaHood bill is designed to tell Illinois he doesn’t care about his district or his state.
“Darin LaHood wants to defund the police… “
- Norseman - Thursday, Sep 24, 20 @ 9:47 am:
Red meat for the red base who don’t bother to think about what is the real ramifications of their actions. They love to use the far left’s “defund the police” mantra against the Dems. The ramifications of not helping states and locals hard hit by the loss of revenue will practically defund the police, fire, schools, public health and so many other services people need.
As usual, we see politicians seek short term political gain that means long term actual pain to the people.
OW is so right. LaHood is NOT his father. And the citizens of IL are worse off because of it.
- Bemused - Thursday, Sep 24, 20 @ 9:49 am:
I am sorry to say, this is my Rep. in Congress. Probably will be until something better comes along. How he can come up with this and stay in office is beyond absurd. Without Federal help many State, County, and local governmental entities will be forced to cut personnel and services. Of course it is all for the good of the people.
- Grandson of Man - Thursday, Sep 24, 20 @ 9:49 am:
“Just move to Indiana already Darin.”
No matter how many people leave Illinois, they won’t be able to escape the national fiscal wreckage that happened under Trump.
- Anne Onymous - Thursday, Sep 24, 20 @ 9:53 am:
Nothing like filing a bill that specifically harms the state you represent
- Woof - Thursday, Sep 24, 20 @ 9:57 am:
Throwing your own state and constituents under the bus, that’s a bold move Darin, let’s see how it plays out.
- Travel Guy - Thursday, Sep 24, 20 @ 9:58 am:
It’s great to see that like many republican lawmakers, LaHood is filing bills that will do nothing but hurt the bulk of his constituents.
I’m sure he’s on-board for more money for corporations and the wealthy though. Maybe we can do more to subsidize already-profitable businesses like big oil. That would really help the unemployed folks in his district.
- Pundent - Thursday, Sep 24, 20 @ 10:00 am:
It’s as if LaHood doesn’t realize that there are Republicans in this state as well. He wants to punish the state as a whole to prove a political point. The pain will be shared equally. Beyond the consequences felt by the state, how does this benefit his district?
And why would we create a standard such as this for the states given how much debt we’ve racked up at the federal level - pre Covid? I don’t recall a single instance of LaHood objecting to that. In that vein he must really be outraged about the suspension of the payroll tax and what it means in funding our Medicare and Social Security obligations.
- Excitable Boy - Thursday, Sep 24, 20 @ 10:01 am:
- with loan forgiveness available only to states with sound pensions, truly balanced budgets and sufficient rainy-day funds -
So loan forgiveness only available to governments that don’t need it. Brilliant.
- Phil King - Thursday, Sep 24, 20 @ 10:04 am:
== Nothing like filing a bill that specifically harms the state you represent==
How does this in anyway harm the state?
It gives Pritzker some aid for immediate cash flow shortages. If he implements basic non-partisan reforms to improve the states financial condition, those loans become grants. Worst case, if he doesn’t support these changes, he has additional lending beyond what he could get from the Fed’s MLF.
- Oswego Willy - Thursday, Sep 24, 20 @ 10:07 am:
=== Nothing like filing a bill that specifically harms the state you represent===
The feature, not the bug.
LaHood is not about helping Illinois, LaHood, like Raunerites, and now Trumpkins, *is* about as much destruction to Illinois as possible by legislation.
The good news is “it’s just a bill”, and lunacy like legislation to appease the nihilist like thinking to an end of hurting everyone won’t find 218 votes. Nope.
Other good news is that LaHood is telling us, once again, who he is, and while he has decided he will never *be* his father, Darin LaHood thinks his anti-dad type politics is smart and winning.
Over and over, I say, I’m so glad when these folks are blatantly honest with things like this. No ambiguity, it’s purpose is to make clear LaHood wants to hurt Illinois, her counties… cities and towns… and cheer with those who enjoy and push for Illinois obstacles.
Believe LaHood, believe his distain for this state is real.
Read the words, they ooze with a person who seemingly despises this state, and hurting people is the brand for *this* LaHood.
- depressed in politics - Thursday, Sep 24, 20 @ 10:08 am:
This bill is like reserving medicine for healthy people or directing fire departments to houses that aren’t on fire.
- Oswego Willy - Thursday, Sep 24, 20 @ 10:11 am:
=== How does this in anyway harm the state?===
Friend, LaHood’s framing, and the lunacy of the Raunerites states that Illinois pensions are unsustainable and the budgets are never balanced… for the love of Pete, that’s the whole existence of “Lucky Pierre” and the comments Lucky Pierre writes.
Either you’re willfully ignorant to why it’s worded as it is or blissfully unaware that words matter.
I’ll let you choose.
- A - Thursday, Sep 24, 20 @ 10:16 am:
Sounds like the state that need the loans most can’t get them while those that dont need the money can. How does this help?
- Arock - Thursday, Sep 24, 20 @ 10:30 am:
Former Downstater- I’m tired of being a donor state.
So I am to assume that you are against the fair tax as well as the premise of the progressive tax is that those that can pay afford to pay more should pay more instead of making those that make less carry the tax burden. We are not going to give the people that pay more tax more of it back because they paid more so why would you expect the Federal government to give more back to our state if it will have an ill affect on a poorer state?
- Arock - Thursday, Sep 24, 20 @ 10:32 am:
Nice to know that Rauner still lives in so many heads on this blog. Last I knew Pritzker is now the Governor and he owns the problems now.
- Oswego Willy - Thursday, Sep 24, 20 @ 10:35 am:
- Arock -
(Sigh)
Your beef isn’t with the Fair Tax, if it was you’d decry the Federal income tax brackets.
Please keep up, it was LaHood who put in the Raunerite talking points, the bill rests like a bunch of Lucky Pierre comments.
I’ll let you choose if your thoughts are willfully ignorant to why it’s worded as it is or blissfully unaware that words matter.
- 33rd ward - Thursday, Sep 24, 20 @ 10:37 am:
Why are Republicans always trying to punish as many people as possible?
- Steve Rogers - Thursday, Sep 24, 20 @ 10:42 am:
I don’t think there is one state that has 100% of pension debt covered. Wisconsin might be the closest–I think they’re above 95%. So, isn’t this just an empty bill that helps no one?
Why bother wasting anyone’s time, Darin?
- Perrid - Thursday, Sep 24, 20 @ 10:44 am:
“with loan forgiveness available only to states with sound pensions, truly balanced budgets and sufficient rainy-day funds.”
I can’t say what I want to say. Rich won’t let me. Odds are I’m still going to say something that gets caught in the filter, but this is outraging.
This small, sad excuse for a man needs to be voted out of office and kept from having the power to hurt anyone else ever again. This really, really, really makes me mad. Put all the strings on the actual loans you want, make sure the funds are used how you want, but how freaking stupid do you have to be to punish the worst off state and local governments? If the governments are doing fine, they don’t have to pay back the loans, but if they’re not fine they have to pay them back (DOZENS OF EXCLAMATION POINTS).
HOW DOES THAT MAKE SENSE.
WHY.
- illinifan - Thursday, Sep 24, 20 @ 10:47 am:
LaHood should do something that would actually help the state. This was just a grandstand move.
- Animus - Thursday, Sep 24, 20 @ 10:54 am:
In the good news department, Rep. LaHood is telling us that he is forfeiting his ability to run for statewide office.
The ‘badmouth the state’ and starve the beast approaches have both been proven as epic failures.
…It should be an interesting family Thanksgiving at the Lahood’s.
- The Zipper - Thursday, Sep 24, 20 @ 10:59 am:
Usually lahood just hurts the state and his constituents by his inactivity and lack of a spine (e.g. doing nothing while Trump hurt farmers), but this seems like a new move of him just actively trying to hurt the state
- Ducky LaMoore - Thursday, Sep 24, 20 @ 11:23 am:
So a guy that cheered on the destruction when the state was bleeding money when he was in the GA wants to make sure we never recover. Not shocking, but sad nonetheless. Are all the phony Rauner and Kirk cronies working for Darin now?
- Stormsw7706 - Thursday, Sep 24, 20 @ 12:17 pm:
Best representation Kentucky and other red state freeloaders could ever hope for. Davis surely will sign onto this also. Also can’t forget State Senator Plummer who wrote letters against Illinois receiving any help. Thanks to their ilk my taxes will continue to climb as they applaud the states who take Illinois tax money.
- Anyone Remember - Thursday, Sep 24, 20 @ 12:21 pm:
“Sound pensions” ?? So states without defined benefit pensions don’t qualify for federal aid? /s
- JS Mill - Thursday, Sep 24, 20 @ 12:25 pm:
So Darin has decided the best way to address the crisis is trolling?
=If he implements basic non-partisan reforms=
LOL, non partisan? You are funny like Darin too I see.
- dbk - Thursday, Sep 24, 20 @ 12:27 pm:
I’m with @Perrid, had to take two breaks while reading this for anger management reasons.
Darin really, really needs to go.
Could somebody in power please ask Darin how introducing legislation deliberately targeting your home state for harm is politically savvy?
It would be appalling if LaHood weren’t so limited intellectually. As it is, it’s kind of pitiful.
Golly, I’m even angrier now than I was before.
- JS Mill - Thursday, Sep 24, 20 @ 12:28 pm:
=Former Downstater- I’m tired of being a donor state.=
Yep.
Question for Arock and the like= where do you think FEMA gets the money for all of those Hurricane clean ups? Or for the highest in the nation medicare disability payments for all of the opioid addicted and “disabled” folks in West Virginia?
- Rich Miller - Thursday, Sep 24, 20 @ 12:28 pm:
===I’m even angrier now than I was before===
It’s just a bill and he’s in the minority party
- dbk - Thursday, Sep 24, 20 @ 12:33 pm:
–It’s just a bill and he’s in the minority party–
I know, I know, but it’s the thought that counts …
- Skeptic - Thursday, Sep 24, 20 @ 1:55 pm:
“How he can come up with this and stay in office is beyond absurd.” I would have chosen the word “gerrymander” over “absurd” but your point is valid. BTW, he’s my rep as well.
- Mama - Thursday, Sep 24, 20 @ 2:54 pm:
==”Darin really, really needs to go.”==
Good luck with that… First you will have to find and fund someone to run against him.
- Mama - Thursday, Sep 24, 20 @ 2:57 pm:
What is the Bill #?
- DuPage - Thursday, Sep 24, 20 @ 3:38 pm:
U.S. Reps writing things to hurt their own state. At least this won’t be passed. Reminds me that Peter Roskam put in a law that hurt many people in his own district, limiting SALT deductions on the Federal income taxes. I don’t know why he did that, but a lot of his strongest supporters felt they got a knife in their back. His poll numbers dropped and he decided to not run again.
- Bruce - Thursday, Sep 24, 20 @ 4:13 pm:
If a loved one was addicted to a compulsive behavior, would you enable it or show tough love.
I pay 10%sales tax, 5 % income tax. Gas tax utility tax…
Totaling approximately 35 to 40 % of my income
And it is still not enough. One drink is too many and 100 not enough.
Every journey starts with a step even if it is a false step.
- dbk - Thursday, Sep 24, 20 @ 5:06 pm:
@Mama: The bill hasn’t been assigned a number yet, but you can link to it here:
https://lahood.house.gov/media-center/press-releases/lahood-introduces-legislation-protect-taxpayers-federal-aid-states
Also @Mama: I know. I’m just not clear about how to proceed with persuading the DCCC to pour some very serious money into the 2022 election. Any ideas?