Government Lending

Pelosi maneuvers McConnell into a corner

Just as COVID-19 costs surge in Republican strongholds, McConnell suggests states go bankrupt

Senate Majority Leader Mitch McConnell (R-KY) made clear last week he thinks Congress is done spending money on the COVID-19 pandemic.

However, House Speaker Nancy Pelosi (D-CA) made the rounds of the Sunday talk shows saying there will be another package heading to the Senate on par with the $2.2 trillion CARES Act that passed in late March. That rescue bill provided beefed-up unemployment benefits aimed at keeping Americans current on bills like monthly mortgage payments.

Another round of relief is needed, Pelosi said, to address states that are grappling with soaring costs as they fight the worst pandemic in more than a century.

McConnell said on Wednesday he’d be fine with allowing states to go bankrupt. New York Gov. Andrew Cuomo called it “one of the saddest, really dumb comments of all time” because it would mean laying off ambulance drivers, morgue workers, police officers, firefighters and other municipal workers in the middle of a public health crisis.

McConnell’s “let them go bankrupt” stance would have his fellow Republican senators backing a position that would result in layoffs of emergency workers just as COVID-19 costs begin rising in their own states.

“When we say state and local we are talking about jobs – jobs on the frontline of coronavirus,” Pelosi said in an MSNBC interview on Sunday. “Our heroes are health care workers, our first responders – our police and firefighters and our transportation workers, our emergency services, our postal workers – all of the people who make our lives possible, many of them risking their lives in order to save lives and now they are in danger of losing their jobs.”

Pelosi received bipartisan criticism for allowing passage of a $484 billion COVID-19 relief bill last week that replenished the Paycheck Protection Program, a lending facility aimed at small businesses, without addressing the need for emergency funds to prop up states overwhelmed by the pandemic.

CNN’s Jake Tapper asked her in an interview on Sunday if she had made a mistake by not including state relief in the smaller package signed by President Donald Trump on Friday.

”Cuomo says he would have insisted on state funding in the last bill,” Tapper said. “And now Senator McConnell is saying he wants to push the pause button. Was this a tactical mistake?”

Pelosi responded by saying, “Just calm down.”

She said there will be additional pandemic funding coming, including additional direct payments to taxpayers to help them get through the economic shutdown, help for a Post Office on the verge of collapse, and support for states.

“We always said that CARES 2 would be the bill where we would go for state and local,” Pelosi said. “And we will in a big way.”

She said House Democrats are already drafting CARES 2 to include an extension of the enhanced unemployment benefits that now are set to expire in July, as well as an expansion of a food-stamp program aimed at children, health benefits for unemployed people, hazard pay for front-line workers, and other measures to address the pandemic.

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