Several Republican senators spoke out on Wednesday against the $350 billion that is earmarked for state and local governments in the $1.9 trillion stimulus bill passed by the House of Representatives last week.
“First, it’s not about COVID. Less than 10 percent of the bill is going to deal with COVID, less than 1 percent is going to deal with vaccines,” Sen. Rick Scott of Florida said at a news conference on Capitol Hill.
Rather he said it was for “blue state bailouts.”
“If you look at state revenues year-over-year, they’re not even down 1 percent. You got a state like California, their revenues are up $19 billion. They’re going to put $22 billion in reserves,” Scott added, citing a New York Times story and referencing California Gov. Gavin Newsom’s January announcement concerning the state’s revenue.
The Times’ analysis relied on a report published by J.P. Morgan finding that 2020 state tax revenues were “virtually flat” when compared to the previous year, declining on average just 0.12 percent.
The figure was based on a review of 47 states that report monthly tax revenue.
Nearly half of these, 21 in fact, saw their revenues go up in 2020.
New economic data shows that a year after the pandemic wrought financial devastation across the U.S., the worst forecasts didn’t come true for many states. https://t.co/0d7ejkw9GY
— The New York Times (@nytimes) March 2, 2021
“Federal stimulus money — particularly the $600 a week unemployment supplement — played a vital role in keep states’ revenues afloat and avoiding a replay of the 2008 financial crisis, when state revenues experienced a record drop and took years to recover, exacerbating the lingering effects of the downturn,” Fox Business reported.
“A separate analysis from Moody’s Analytics found that 31 states have enough cash to fully absorb the economic pain of the pandemic recession on their own,” the outlet added.
“This is not an effort to actually find solutions, this is an effort to pay off big cities and blue states that have been behaving irresponsibly and have been basically a cesspool of mismanagement for decades,” Republican Sen. John Barrasso of Wyoming told Fox Business.
Scott warned during Wednesday’s news conference that if the federal government continues to borrow and spend at current levels, both interest rates and inflation will continue to rise.
The senator argued that the poorest families will be hurt the most by this as basic necessities like food and gas prices rise.
Sen. Pat Toomey of Pennsylvania, who serves on the Senate Banking, Budget, and Finance committees, pointed out that state and local governments received about $500 billion in COVID-related relief funds last year.
Further, revenues nationwide for state and local governments hit a record high in 2020, with collections showing $20 billion more than 2019.
“This has nothing to do with COVID. This has nothing to do with the economy,” Toomey said.
“This has everything to do with just throwing a whole big pile of money at fiscally irresponsible states.”
Sen. Marsha Blackburn of Tennessee called the $350 billion in the House bill “manna from heaven” for blue states.
Sen. Marsha Blackburn: “If you didn’t know better, you would say that this behemoth of a spending bill is all about demoralizing the American people.” pic.twitter.com/ELeg9WKDXr
— The Hill (@thehill) March 4, 2021
“They have pensions that are not funded,” she said. “They have state governments that have not been well-managed, and so now they’re looking to the federal government to come in and bail them out.”