McConnell’s said States should go bankrupt over COVID-19 he's not giving no money to State's
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.
On April 11, the National Governors Association wrote a letter asking Congress to approve $500 billion in funding for financial assistance to states.
Income tax revenue has also gone down because more and more people are becoming unemployed and thus not paying income taxes.
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.
The recently passed federal CARES Act contained zero funding
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.
Mitch McConnell “I would certainly be in favor of allowing states to use the bankruptcy route"
“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.
While $500 billion might seem like a lot to McConnell, that was the exact amount of money that Congress gave to bail out corporations