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McConnell Faces Bipartisan Backlash for Saying States Should Declare Bankruptcy

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  • Another 4.4 million people filed for unemployment last week meaning that now, nearly 20% of Americans are unemployed.
  • Meanwhile, states are running out of unemployment funds and other fiscal reserves.
  • Despite pressure from Democrats, the most recent stimulus bill does not provide any money to states.
  • In an interview, Mitch McConnell said he would rather see states go bankrupt then give them more money, a remark that was criticized by both Democrats and Republicans.

Mitch McConnell Says States Should File for Bankruptcy

Senate Majority Leader Mitch McConnell (R-KY) drew bipartisan criticism Wednesday after saying that he would prefer to see states file for bankruptcy than borrow money from the federal government.

The remark, made during a radio interview, came one day after the Senate passed an interim $484 billion stimulus package. The House is expected to pass the bill Thursday afternoon.

Despite pressure from Democrats, the new legislation went forward without any funding for states.

“I think this whole business of additional assistance for state and local governments needs to be thoroughly evaluated,” McConnell told Hewitt.

“I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities. And there’s no good reason for it not to be available,” he added. “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. That’s not something I’m going to be in favor of.”

McConnell’s words quickly sparked outrage, especially among Democratic governors.

New York Gov. Andrew Cuomo slammed McConnell’s statement, calling it “one of the saddest, really dumb comments of all time.”

“You talk about one issue where you think you can get past partisanship and pettiness and you talk about communities where people are dying, and you say they are blue states,” he added. “How am I supposed to reopen if you want me to declare bankruptcy?”

Some Republicans also condemned the Majority Leader’s remarks as well. 

“McConnell’s dismissive remark that States devastated by Coronavirus should go bankrupt rather than get the federal assistance they need and deserve is shameful and indefensible,” Rep. Pete King (R-NY) said on Twitter.

“To say that it is ‘free money’ to provide funds for cops, firefighters and healthcare workers makes McConnell the Marie Antoinette of the Senate.”

It is unclear how serious McConnell is about this idea, or how viable it would be. States do not have the power to declare bankruptcy, and allowing them to do so would require a change in federal law.

As Bloomberg explains, the idea was floated before during the 2008 recession, but it “drew widespread disdain from Wall Street investors, public employee unions and both Republican and Democratic governors, who said it would unsettle the bond market and cause even the most fiscally sound states to face higher interest rates because of the risk the debt could be wiped out in court.”

At the same time, Democrats have said they will push for funding in the next stimulus bill— a move President Donald Trump said he would support. After a meeting with Cuomo Tuesday, Trump said that states will need assistance.

“And I think most Republicans agree too, and Democrats,” he added. “And that’s part of phase four.”

States Running Out of Money

McConnell’s remarks underscore the dire situation states are finding themselves in when it comes to money.

With more than 26 million people filing for unemployment since mid-March, states are quickly running out of unemployment funding. There is also increased demand for other social safety-net programs that are either wholly or partially state-funded.

At the same time, the impetus of coronavirus-related spending has fallen on states, as the Trump administration continues to put the bulk of the work and responsibility in the hands of governors.

On top of all that, the economic shutdowns have also significantly decreased tax revenues. According to reports, sales taxes revenue—which is the biggest source of revenue for most states— has tanked because businesses are shut down and consumers are staying home.

Income tax revenue has also gone down because more and more people are becoming unemployed and thus not paying income taxes. That is also not helped by the fact that tax filing deadlines have been extended.

Unlike the federal government, the vast majority of states cannot deficit spend if they run out of money. Currently, 46 states and DC have laws that require them to keep a balanced budget, and the four states that do not still have pretty strict rules.

That means in order for states to get more money without federal help, they would either have to raise taxes, make significant budget cuts, or both.

But now is the worst possible time for that. Already, tens of millions of people cannot make ends meet, much less pay higher taxes. On top of that, governments need all the money they can get to pay for social services and other expenses they are already struggling to pay

On April 11, the National Governors Association wrote a letter asking Congress to approve $500 billion in funding for financial assistance to states.

“The recently passed federal CARES Act contained zero funding to offset these drastic state revenue shortfalls,” they wrote. “To stabilize state budgets and to make sure states have the resources to battle the virus and provide the services the American people rely on, Congress must provide immediate fiscal assistance directly to all states.”

The governors also said that they wanted the stimulus bill to be amended to allow the money given to states exclusively for coronavirus response to be used to replace lost revenue as well.

While $500 billion might seem like a lot to McConnell, that was the exact amount of money that Congress gave to bail out corporations in the $2 trillion stimulus package in March.

See what others are saying: (The New York Times) (Bloomberg) (The Wall Street Journal)

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Former Capitol Security Officials Blame Intelligence Failures for Insurrection

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  • During the Senate’s first hearing into security failures that lead to the Jan. 6 Capitol insurrection, top officials provided new insights but shirked responsibility.
  • Many blamed the FBI for not gathering more information or properly communicating what they did know, arguing that the breakdown was a result of the intelligence community not taking domestic extremism seriously.
  • Police leaders noted that a bulletin from an FBI field office warning of a “war” at the Capitol, issued a day before the insurrection, was not properly flagged or delivered.
  • However, others noted that the Capitol Police had in fact issued an internal alert three days before warning of similar threats.

Security Officials Shirk Responsibility

Former top officials responsible for security at the U.S. Capitol during the Jan. 6 insurrection testified before the Senate for the first time Tuesday.

While the testimonies represented the most detailed accounts of the security failures leading up to and during attacks, they also raised questions about how those failures came out.

The top officials did acknowledge some of their own mistakes and admitted they were unprepared for such an event. Still, they largely deflected responsibility for the breakdown in communication and instead blamed intelligence officials, their subordinates, and even each other at times.

All of the officials testified that the FBI and the intelligence community had failed to detect information about the intentions of the pro-Trump insurrectionists and properly relay what they did know before the attack.

Former Capitol Police Chief Steven Sund and acting D.C. Police Chief Robert Contee depicted the collapse in communication as a broader failure of U.S. intelligence agencies to take domestic extremism as seriously as foreign threats.

Specifically, both officials mentioned this in the context of a bulletin issued a day before the insurrection by the FBI’s office in Norfolk, Virginia. That bulletin warned of a “war” at the Capitol on Jan.  6.

In his testimony, Sund — who resigned the day after the insurrection — disclosed for the first time that the alter had in fact been sent to the Capitol Police through the Joint Terrorism Task Force but said it was never forwarded to him or either of the House and Senate sergeants-at-arms.

Contee also said the D.C. police department received the warning, but it was a nondescript email and not labeled as a priority alert that would demand immediate attention.

“I would certainly think that something as violent as an insurrection at the Capitol would warrant a phone call or something,” he told the Senators.

Contradictory Information

However, lawmakers pointed out that the Capitol Police did have warnings about the attack in the form of their own internal intelligence report issued three days before the planned pro-Trump rally that preceded the storming of the Capitol.

In that 12-page memo, some of which was obtained by The Washington Post, the Capitol Police intelligence unit warned that “Congress itself” could be targeted by Trump supporters who believed the electoral college certification was “the last opportunity to overturn the results of the presidential election.”

The memo also noted the large expected crowds, the fact that organizers had urged Trump supporters to bring guns and combat gear, and that “President Trump himself” had been promoting the chaos.

Two people familiar with the memo told The Post that the report had been relayed to all Capitol Police command staff, though in their testimonies Tuesday, the former security officials said the intel they had did not have enough specifics about the potential for an attack.

Some, however, appear to doubt the series of events detailed by Sund. On Tuesday, Buzzfeed filed a lawsuit against the Capitol Police for records related to the insurrection. The agency has been criticized for not providing enough information to the media, and contradictory testimonies delivered to Senators likely raised more red flags.

Lawmakers Emphasize Need for Better Precautions 

The argument that there was so much vague, threatening online chatter making it hard to distinguish what was legitimate is something that many law enforcement officials have used to explain their failure to prepare for the attacks.

In fact, that was the exact same response the FBI gave reporters Tuesday after Sund and Contee blamed them for not giving an explicit or strong enough warning. Lawmakers hope that the many hearings and ongoing investigations into the matter will result in tangible policy changes to prevent similar attacks from happening again.

While it is currently unclear what that will look like, many leaders have emphasized the need for a broad rethinking of how the U.S. addresses domestic extremist threats at every level.

“There’s no question in my mind that there was a failure to take this threat more seriously, despite widespread social media content and public reporting that indicated violence was extremely likely,” Sen. Gary Peters (D-Mi.) told reporters Tuesday. 

“The federal government must start taking these online threats seriously to ensure they don’t cross into the real-world violence.” 

See what others are saying: (The Washington Post) (The New York Times) (The Associated Press)

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Illinois Rep. Files Bill To Ban Video Games Like “Grand Theft Auto” Amid Carjacking Spikes

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  • Illinois State Rep. Marcus Evans (D) has proposed a bill that would crack down on certain video games in hopes of reducing a dramatic uptick in Chicago carjackings.
  • Illinois law currently bans people from selling “violent video games” to minors; however, Evans’ bill seeks to ban the sale of “violent video games” to anyone in the state. 
  • Among other language, Evans is seeking to expand the state definition of “serious physical harm” related to video games so that it includes “motor vehicle theft with a driver or passenger present inside the vehicle when the theft begins.”
  • A number of gamers have criticized the bill, calling it a misguided approach for reducing violence in the state. 

“Grand Theft Auto” Bill

Illinois State Representative Marcus Evans (D) has filed a bill that, if passed, would ban the sale of violent video games to anyone in the state.

While the bill does address the frequent debate around whether gun violence in video games inspires real-world violence, Evans is actually filing the bill primarily in response to a series of carjackings in Chicago. In fact, the bill was largely conceived with the game “Grand Theft Auto” in mind.

“‘Grand Theft Auto’ and other violent video games are getting in the minds of our young people and perpetuating the normalcy of carjacking,” Evans said. “Carjacking is not normal and carjacking must stop.” 

According to the Chicago-Sun Times, Chicago saw 1,400 carjackings in 2020 — double that of what it saw in 2019. That’s now continued into this year, with 241 carjackings already reported in the city as of Monday. Earlier this week, police charged two boys, ages 13 and 14, with stealing a man’s car after holding him at gunpoint.

The latest addition to the “Grand Theft Auto” franchise was released in 2013. Notably, Chicago carjacking rates in 2013, 2014, and 2015 were the lowest of the previous decade.

Source: David Struett/Sun-Times

The bill Evans has filed would amend a current Illinois law that restricts the sale of “violent video games” to minors. 

As part of his amendment to include all age groups, Evans wants to update the definition of “violent video game” under state law to include games that “perpetuate human-on-human violence in which the player kills or otherwise causes serious physical or psychological harm to another human or an animal.”

Evans also wants to update the definition of “serious physical harm” related to video games so that it would include “psychological harm and child abuse, sexual abuse, animal abuse, domestic violence, violence against women, or motor vehicle theft with a driver or passenger present inside the vehicle when the theft begins.”

Gamers Say Evans’ Argument Is Misplaced

Among gamers, Evans’ bill has reignited conversations around video games and violence.

“Carjackings have happened before games and Marcus Evans thinks today that it’s the fault of video games like GTA?” one person tweeted. “I never had any need for committing crimes playing games my whole life.”

See what others are saying: (The Hill) (Fox 32 Chicago) (NME)

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California Lawmakers Pass $7.6 Billion Stimulus Package With $600 Checks

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  • The California State Legislature approved a $7.6 billion stimulus package Monday that will send out around 5.7 million stimulus checks to qualifying state residents.
  • Most of the direct payments will be given to people who make under $30,000 a year.
  • Over half a million will go to people who have an individual tax identification number (ITIN) instead of a Social Security number and an annual income of under $75,000. Most people with ITINs are immigrants, and none were eligible for the federal stimulus checks.
  • Additional provisions of the bill include over $2 billion in grants and fee waivers for small businesses as well as $35 million for food and diaper banks, among other things.

California Stimulus Bill

California legislators passed a $7.6 billion stimulus package Monday that Gov. Gavin Newsom (D) has said he will sign on Tuesday.

Among other measures, the bill would send out stimulus checks worth $600 to qualifying people. According to reports, $2.3 trillion — nearly a third of the whole package — will be used to send out roughly 5.7 million direct payments.

Around 3.8 million of those checks will go to Californians that make less than $30,000 annually and thus qualify for the state earned income tax credit. Officials have said that Californians who claim the credit on their 2020 taxes can expect to receive their money within four to seven weeks of filing.

Another 1.2 million residents who receive either federal or state supplemental income will get the checks, and 405,000 additional payments will be placed directly on the EBT cards of CalWORKS participants, the state’s welfare-to-work program.

Notably, about 565,000 stimulus payments will go out to people who have what’s known as an individual tax identification number (ITIN) rather than a Social Security number. Most of those people are immigrants, and no one with an ITIN received either of the last two federal stimulus payments.

As a result, the California stimulus bill will give out $600 payments to people with ITIN’s who make below $75,000 a year, and a total of $1,200 to those who make $30,000 and qualify for the earned income tax credit.

In addition to the direct payments, the legislation also includes more than $2 billion in grants and fee waivers for small businesses, $30 million for food banks, and $5 million for diaper banks. The legislature is also expected to approve an additional $2 billion in tax breaks for businesses later this week, which would effectively bring the total package to $9.6 billion.

U.S. House To Pass Federal Stimulus Package This Week

The California package comes as Democrats in Congress are hashing out the details of the next federal coronavirus relief bill.

On Monday, President Joe Biden’s $1.9 trillion stimulus package advanced through the House Budget Committee, and according to reports, barring any major objections, it is expected to be passed by the chamber as soon as Friday or Saturday.

The hard part, however, will be getting it passed through the Senate, where all 50 Democrats and Vice President Kamala Harris will need to approve the legislation. In order to ensure that some of the more moderate members are on board, leadership will likely have to have to hold negotiations and possibly scrap certain parts of the House’s version of the package.

One provision on the chopping block is a measure that would raise the federal minimum wage to $15 an hour, which has already drawn opposition from at least two Democratic Senators. 

See what others are saying: (The Los Angeles Times) (CBS News) (CNBC)

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