McConnell Faces Bipartisan Backlash for Saying States Should Declare Bankruptcy
- 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)
White House Endorses Bipartisan Senate Bill That Could Ban TikTok
The measure does not target TikTok specifically but instead would set up a framework to crack down on foreign products and services that present a national security threat.
The RESTRICT Act
A bipartisan group of senators introduced a bill Tuesday that would allow the federal government to restrict or even outright ban TikTok and other technologies produced by foreign companies.
Under the legislation, dubbed the RESTRICT Act, the Commerce Department would have sweeping authority to identify and regulate technologies that pose a risk to national security and are produced by companies in six “foreign adversary” countries: China, Russia, Iran, Cuba, Venezuela, and North Korea.
In other words, the proposal would not explicitly ban TikTok, but instead creates a path for future prohibitions on the Chinese-owned platform.
While the bill’s text does not specifically mention TikTok, the group of senators made it clear that the app is their number one target, directing most of their criticism to the platform in statements announcing the measure.
The legislation, however, would go way beyond TikTik: it is also designed to prepare for future situations where apps or technologies from an “adversary” country become popular in the U.S.
The bill’s Democratic sponsor, Sen. Mark Warner (D-Ma.), echoed that point in his remarks Tuesday.
“Today, the threat that everyone is talking about is TikTok, and how it could enable surveillance by the Chinese Communist Party, or facilitate the spread of malign influence campaigns in the U.S.,” he said. “Before TikTok, however, it was Huawei and ZTE, which threatened our nation’s telecommunications networks. And before that, it was Russia’s Kaspersky Lab, which threatened the security of government and corporate devices.”
“We need a comprehensive, risk-based approach that proactively tackles sources of potentially dangerous technology before they gain a foothold in America, so we aren’t playing Whac-A-Mole and scrambling to catch up once they’re already ubiquitous.”
Proponents of the bill also hope that, given the broad scope of the legislation, it will gain more traction than past proposals that zeroed in on TikTok. Support for the measure was further bolstered when the White House announced it would back the move shortly after it was rolled out.
“This bill presents a systematic framework for addressing technology-based threats to the security and safety of Americans,” National Security Advisor Jake Sullivan said in a statement. “We look forward to continue working with both Democrats and Republicans on this bill, and urge Congress to act quickly to send it to the President’s desk.”
A Bumpy Road Ahead
Despite the bipartisan push, there are still some hurdles for the RESTRICT Act to overcome.
Although the legislation does not directly ban TikTok, because that is clearly its intent, the same issues with an outright prohibition still stand. One of the most serious concerns is that banning TikTok would violate the First Amendment.
There is past precedent on this front: in 2020, a federal magistrate judge blocked the Trump administration from requiring Apple and Google to take the Chinese-owned app WeChat off their app stores.
In that decision, the judge argued that the government only had “modest” evidence about the app’s risks and that removing it from app stores would “burden substantially more speech than is necessary to serve the government’s significant interest in national security.”
TikTok has emulated that argument. In a statement responding to the RESTRICT Act Tuesday, a spokesperson for the company said the legislation could “have the effect of censoring millions of Americans.”
Meanwhile, even if the act does pass, there is also the question of whether the Biden administration would decide on a full-scale ban.
Commerce Secretary Gina Raimondo would be the one responsible for overseeing the process under the bill, and while she said she said in a statement that she “welcomed” the proposal and promised to work with Congress to pass it, she has also previously expressed hesitation for a full prohibition.
On the other end of the equation, there are concerns that this measure will not ultimately get enough bipartisan support from Republicans who do want an outright ban and will refuse to accept anything that falls short of that.
While speaking with Fox News on Tuesday, Sen. Marco Rubio (R-Fl.) said the new plan did not go far enough and argued that Congress “should pass a bill that bans TikTok.”
Even if the legislation does get enough support in the Senate, its path is unclear in the GOP-held House, where it also does not yet have a companion bill. Republicans in the House recently introduced a measure that would give the president the power to unilaterally ban TikTok in the U.S.
That proposal, however, is not bipartisan like the RESTRICT Act, which will be a key test to see if legislators can find a middle ground on the matter.
See what others are saying: (The Washington Post) (Reuters) (NBC News)
What You Need to Know About Wisconsin’s Supreme Court Race — The Most Important Election in 2023
Gerrymandering, abortion, the 2024 presidential election, and much more are on the line.
An election to fill an empty seat on the Wisconsin Supreme Court that has been described as the most consequential race of 2023 has now been narrowed to two candidates after the primary Tuesday.
Liberal Milwaukee County Judge Janet Protasiewicz easily took first place, winning 46.4% of the vote with nearly all precincts reporting. In second place with 24.2% was conservative Daniel Kelly, a former Wisconsin State Supreme Court justice who was appointed by the state’s then-Republican governor in 2016 but lost his re-election in 2020.
Notably, the wide discrepancy in votes can be explained by the fact that Kelly split Republican ballots with another conservative candidate who came in a close third with 21.9%. As such, the general election is expected to be tight.
Also of note, this race is technically supposed to be non-partisan, but Protasiewicz has closely aligned herself with Democrats and Kelly has done the same with Republicans. Both parties, as well as dark money groups, have poured millions of dollars into the high-stakes election that will determine whether liberals or conservatives will have a 4-3 majority on the state Supreme Court at an incredibly consequential time.
There are a number of paramount issues at play here that have widespread implications not just for Wisconsin but America at-large.
Gerrymandering and Elections
Wisconsin is one of the most important swing states in the country: it helped decide the outcomes of both the 2016 and 2020 presidential elections, and it is the center of debates on gerrymandering and free and fair elections that have played a role in those races.
The state Supreme Court, which has had a conservative majority for the last 14 years, has been instrumental in shaping those policies, having weighed in on many of the most crucial topics and almost always siding with Republicans.
For example, in what VICE described as “arguably the most important decision the court made in recent years,” the court ruled 4-3 last year to uphold one of America’s most gerrymandered maps that gave Republicans a massive advantage.
“The maps are so gerrymandered that Republicans hold six of Wisconsin’s eight House seats and nearly two-thirds of legislative seats in the state—even though Democrats won most statewide races last year,” the outlet reported.
That ruling created something of a self-fulfilling prophecy: the conservative majority court has decided so many critical topics because the state government is deadlocked with a Republican majority in the legislature and a Democratic governor.
So, by approving a map that massively favored Republicans, the conservative court kept that system in place, ensuring that they would continue to have the final say on so many of these essential areas.
However, if Protasiewicz wins the general election, the court is all but certain to revisit the gerrymandered map. Protasiewicz, for her part, explicitly stated in a recent interview that a liberal majority could establish new election maps. Kelly, meanwhile, has said he has no interest in revisiting the maps.
A decision unfavorable to the GOP-drawn maps would have significant implications for the internal politics of Wisconsin and control of the U.S. House of Representatives, where Republicans currently hold a very slim five-seat majority.
To that point, the Wisconsin Supreme Court also plays a big role in how the state’s elections are administered and how its ten Electoral College votes will be doled out in the 2024 presidential election.
Last year, the conservative court banned absentee ballot drop boxes, and in 2014, it upheld a GOP voter ID law that studies have shown suppressed Black voters. While the court did vote against considering former President Donald Trump’s lawsuit to try and overturn the 2020 election in Wisconsin, it only did so by a thin margin of 4-3.
The court will very likely be tasked with wading into elections-related cases in the coming years. Already, it is anticipated that the justice will hear a lawsuit by a conservative group aiming to further limit voting access by banning mobile and alternate voting facilities.
Abortion and Other Important Statewide Subjects
In addition to the ramifications for America broadly, there are also plenty of paramount issues concerning the state Supreme Court that will materially impact the people of Wisconsin.
Much of the race has been centered heavily on the topic of abortion and reproductive rights because the composition of the court will almost positively determine whether or not abortion will be legal for the state’s six million residents.
Following the Supreme Court reversal of Roe v. Wade, an 1849 Wisconsin law banning abortion went back into effect. Currently, a lawsuit against the ban is winding its way through the court system, and it is all but assured that battle will eventually go before Wisconsin’s Supreme Court.
Experts and analysts say that if Kelly wins, it is essentially guaranteed that abortion will remain illegal in almost all cases. Protasiewicz, by contrast, has campaigned extensively on abortion rights and vocally supported the right to choose.
Beyond that, there are also several other major issues the court will likely rule on in the coming years. For example, Protasiewicz has also said she believes a liberal majority could reverse a 12-year-old law that basically eliminated collective bargaining for public workers. All of that is just the tip of the iceberg.
“Everything is at stake, and I mean everything: Women’s reproductive rights, the maps, drop boxes, safe communities, clean water,” Protasiewicz told VICE. “Everything is on the line.”
See what others are saying: (VICE) (The New York Times) (The Washington Post)
Republicans Want to Cut Food Stamps — Even As Pandemic-Era Programs Wind Down
Experts say cuts to food stamps could have a devastating impact on the 41 million Americans who rely on the program.
GOP Weighs SNAP Cuts in Budget
In recent weeks, top Republican lawmakers have floated several different ideas for cutting food stamp benefits.
Earlier this month, Republicans now leading the House Budget Committee flagged food stamps — formally known as the Supplemental Nutritional Assistance Program, or SNAP — as one of the ten areas they would support cuts to in their new budget proposal.
In a memo, the panel argued that stricter work requirements would “save tens of billions,” while a more rigid verification process for applicants would limit waste, fraud, and abuse. The idea comes as part of a broader effort to reduce the federal deficit.
Experts, however, say the proposed changes could result in debilitating cuts for the 41 million Americans who rely on food stamps and exacerbate an ongoing hunger crisis at a time when inflation has sent food prices rising.
SNAP provides low-income households with an average of around $230 a month for groceries. For many of those families who are also the most impacted by inflationary price increases across the board, that money is absolutely essential.
Experts have also noted that any additional cuts to SNAP would be especially harmful because Republicans are still proposing new cuts despite the fact that Congress already agreed just two months ago to end a pandemic-era program that had increased benefits in some states.
Under the pandemic policies, SNAP was expanded so households could receive maximum benefits instead of benefits based on income testing while also giving bigger payouts to the lowest-income Americans.
That expansion is now set to expire in March, and according to the anti-hunger advocacy group the Food Research and Action Center, an estimated 16 million households will see their per-person benefits drop by around $82 a month.
The Farm Bill Debate
Even if Republicans do not end up cutting SNAP in the budget, the program may still be in hot water.
While raising the debt limit is at the forefront of ongoing partisan battles at the moment, there is already a fight shaping up over another essential piece of legislation: the farm bill.
The farm bill is a package that has to be updated and reauthorized every couple of years. One of the most important legislative tasks Congress is responsible for, the farm bill includes many important subsidies and programs that are imperative to America’s food systems, farms, and much more.
SNAP is among the nutrition-based programs that fall under the purview of the farm bill, and Republicans have already tossed around the idea of cutting food stamp benefits in their ongoing negotiations.
Those debates are quite forward-looking, though it is normal for such discussions to occur early during a year in which Congress is charged with passing the farm bill. Lawmakers have until Oct. 1 to either enact a new version or agree on some kind of extension.