McConnell says states should be able to declare bankruptcy, wants to hit 'pause' on federal aidFox News, Apr 22, 2020
With the coronavirus crisis hitting state budgets hard, Senate Majority Leader Mitch McConnell, R-Ky., said Wednesday that he is open to allowing states to declare bankruptcy -- rather than sending governors more federal money to deal with their own ballooning deficits.
McConnell made the comments on "The Hugh Hewitt Show" against the backdrop of governors imploring the federal government for urgent fiscal help and congressional Democrats seeking to work with the Trump administration to provide it. McConnell, instead, said he "would certainly be in favor of allowing states to use the bankruptcy route," an option that is not currently available to them -- as he called for a "pause" in such aid from Washington.
"I mean, we all represent states. We all have governors regardless of party who would love to have free money," McConnell said in response to a question on what the federal government should do to help states in tricky financial situations. "And that’s why I said yesterday we’re going to push the pause button here, because I think this whole business of additional assistance for state and local governments need to be thoroughly evaluated."
McConnell then mentioned that many states are struggling with funding pensions or similar programs, saying "[t]here's not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations."
After Hewett weighed in, criticizing liberal states that racked up significant liabilities, McConnell said he favored letting states declare bankruptcy, as local governments are allowed to.
"Yeah, I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities," McConnell said. "And there’s no good reason for it not to be available."
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