McConnell Delivers Gut Punch to His Home State, Dems Say 1

Mitch McConnell had a clear message on Wednesday to state and local governments anxiously waiting on Washington for more relief aid to cope with the coronavirus: Don’t look at me.

“I mean, we all represent states. We all have governors regardless of party who would love to have free money,” McConnell told conservative radio host Hugh Hewitt. “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 (R-KY) may be the Senate Majority Leader, a powerful lawmaker tasked with shaping legislation with national concerns in mind. But, as he noted to Hewitt, McConnell does indeed represent a state—and his comments echoed loud and clear there.

“It was kind of like a punch in the stomach to read,” Joni Jenkins, the Democratic minority leader in Kentucky’s state House of Representatives, told The Daily Beast. She explained that Kentucky, like nearly every state and local government in the country, is staring down an unprecedented fiscal squeeze. With normal business and commerce ground to a halt, sales tax revenue is drying up; skyrocketing unemployment rates mean that state income tax revenues will crater, too. 

The Kentucky legislature, which just recessed for the year last week, passed a one-year austerity budget in response to the coronavirus’ economic damage. The functions of government are getting hard-hit: the University of Kentucky, for example, announced this week it faces a $70 million budget shortfall and is furloughing employees. 

Jenkins said that the legislature will have to reconvene if state revenues dip by more than 5 percent, which is likely. “Many of us were hoping for federal help,” she said. “I don’t see how we get out of this downward spiral without some help from the federal government.”

A similar feeling was expressed by the state’s Democratic governor, Andy Beshear, at a press availability on Wednesday. Asked about McConnell’s comments, Beshear said he hoped to discuss the matter with him personally. But, said the governor, “every state in the country is going to be in desperate need of federal aid. If the federal government doesn’t provide that aid, it’ll further exacerbate the recession we are in… It will make restarting the economy that much more difficult.”

With McConnell on the ballot in his home state this November—and facing a well-funded Democratic opponent— his inclination to cut off state and local governments during a crisis might seem like a puzzling political move.

But McConnell, as canny a political operator there is in Washington or anywhere, might have different parochial political considerations in mind. The GOP leader has framed federal assistance to state and local governments as “blue state bailouts”—partially because the coronavirus outbreak has disproportionately affected heavily Democratic states like New York and New Jersey

The $2.2 trillion CARES Act passed in March contained a $150 billion relief fund to state, local, and tribal governments, with funding levels largely tied to population. Efforts from Democrats to replenish that fund were swatted down by the GOP in the nearly half-trillion dollar package the Senate passed on Tuesday.

Taking a stand against sending further aid to these states could play well politically with Kentucky’s conservative voters, even if it means state and local governments in the commonwealth see less aid, said Stephen Voss, a professor of political science at the University  of Kentucky. 

“He’s the head of the Republican Party—supposed to be the fiscally conservative choice—but he and the Republicans in Congress have been signing off on massive amounts of money to try to combat the effects of COVID,” Voss told The Daily Beast. McConnell signaling a tightening of purse strings on state and local funds, he said, “lets him straddle the need to act and the need to show they’re not spending frivolously.”

But McConnell’s pursuit of the perception of fiscal responsibility rankles his critics, who note that before the senator motioned to turn off the tap for federal aid to states, he spent the lead-up to his reelection campaign flexing his ability to deliver billions of dollars to Kentucky, in the CARES Act and elsewhere.

After the CARES Act passed in March, McConnell’s campaign began running ads in Kentucky touting his role in securing the legislation. “America is in crisis like never before. And in times of crisis, we look to leaders,” the ad said. “Mitch McConnell led the passage of the biggest economic rescue package in history.”

“If he’s going to take credit for spending $2.2 trillion of federal tax dollars and then $484 billion in federal tax dollars, and then try to make the argument this is not the federal government’s role, why the hell did he do it?” asked Rep. John Yarmuth, Kentucky’s lone Democratic congressman. “He’s already taking credit for it here, the ads are running every day. It’s nonsense.”

And after Congress passed a year-end spending bill last December, McConnell returned to his home state to tout nearly $1 billion in direct federal spending for Kentucky. In recent months, McConnell has announced his role in securing millions in federal money for local infrastructure projects, medical supplies, and a program at the University of Louisville, home to the political science center that bears his name.

For states and localities tasked with squaring an impossible fiscal circle because of COVID-19, McConnell suggested to Hewitt on Wednesday other remedies: raising taxes, and bankruptcy. States, which nearly all have statutory requirements to balance their budgets every year, currently cannot pursue bankruptcy. McConnell told Hewitt that should change.

The leader’s suggestion came across as salt in the wound to officials in Kentucky. “I don’t want to be in that situation whatsoever,” Beshear said on Wednesday. “We ought to be working with the federal government with the stimulus that they’re providing to make sure we can continue to operate state government, not deepen any economic hardships we are facing.”

The remark also earned McConnell harsh criticism from members of his own party, though not in Kentucky. Rep. Peter King, a Republican who represents a Long Island district near the disease’s epicenter in New York City, called the bankruptcy remark “shameful and indefensible.”

“To say that it is ‘free money’ to provide funds for cops, firefighters, and healthcare workers makes McConnell the Marie Antoinette of the Senate,” said King. The Daily Beast reached out to several GOP officials in Kentucky to ask for comment, but none responded.

And Democrats like Yarmuth wondered what would happen if state and local entities have to cut down on essential services like emergency medical responders, firefighters, police, and transportation. “If the city isn’t getting any revenue, which right now it basically is not, how are they going to pay their first responders?” asked Yarmuth, who represents the Louisville area where McConnell lives.

“Whether you’re in an urban or rural area, if you call the police and they don’t show up because they are short-staffed, if you call an ambulance and they don’t show up because they’re short-staffed,” said Jenkins, “this affects you no matter where you live in the state.”

McConnell and like-minded allies have implied that states have been fiscally irresponsible and that any further appropriation of funds from Washington amounts to a federal bailout of bad decision-making. 

“States should always plan for a rainy day just like any business,” tweeted former South Carolina Gov. Nikki Haley on Thursday. “I disagree that states should take Fed money or be bailed out. This will lead to taxpayers paying for mismanagement of poorly run states.”

McConnell specifically mentioned public employee pension obligations in his interview with Hewitt—something that has become a defining feature in Kentucky politics in recent years. The state government’s enormous public-employee pension obligation has threatened to consume Kentucky’s budget; the austerity-driven response from former GOP Gov. Matt Bevin is seen by many as a major reason why Beshear ousted him in 2019. 

“If you’re ticked off about the Republicans trying to deal with budgetary shortfalls by figuring out ways to lessen pension obligations in Kentucky, you’re already ticked off at Republicans,” said Voss. “It doesn’t cost [McConnell] that much to signal to people who might not want money flowing to those places to realize he’s holding the line.”