Pelosi: No More Virus Bailouts Without State and Local Aid

The virus has battered state budgets from coast to coast

House Speaker Nancy Pelosi, D- Calif., speaks during a news conference on Capitol Hill, April 24, 2020, in Washington.
Andrew Harnik/AP

House Speaker Nancy Pelosi insisted Friday that Congress’ next economic package provide billions for financially reeling state and local governments, foreshadowing a sharp partisan fight ahead in lawmakers' continuing response to the coronavirus pandemic.

“There will not be a bill without state and local” aid, Pelosi, D-Calif., told reporters in the Capitol. Suggesting that Democrats have leverage to address a problem that shows no signs of vanishing soon, she also said, “There will be a bill, and it will be expensive.”

While Pelosi cited no price tag, she said it could be roughly what Congress has already provided for small businesses in previous legislation, which has exceeded $500 billion.

Pelosi's remarks put her in direct conflict with Senate Majority Leader Mitch McConnell, R-Ky. He has expressed opposition to providing more local help, at least for now.

But President Donald Trump has been a wild card, making comments that have wavered between support and skepticism. In addition, some GOP senators and governors have called for more aid for state and local governments.

That suggests an election-season battle in which a compromise might ultimately be necessary.

Pelosi's remarks came on the day the virus's U.S. death toll surpassed 50,000 and as 1 in 6 American workers have filed for unemployment benefits in just five weeks. State budgets from coast to coast have been battered, with the dormant economy withering their sales tax revenues and stratospheric job losses driving up their unemployment benefit costs.

But Washington's battle over aiding them has taken on a partisan tone. Some of the hardest-hit states — and most outspoken governors — include reliably Democratic New York, California and Illinois.

Senate Minority Leader Chuck Schumer, D-N.Y., and other congressional Democrats are also demanding more aid for state and local governments.

Pelosi has begun framing the battle in political terms. She has said House Democrats will include the money in legislation they will call the “Heroes Act” because it will include funds to pay the salaries of police, firefighters, transit workers, health workers in public hospitals and others battling the virus.

With a salmon-colored scarf lowered from covering her face, Pelosi told reporters at a news conference that it would be “morally wrong" to not help those workers.

“We can’t defeat this pandemic if Mitch McConnell is letting our health heroes get fired, and that’s what’s happening," she said.

That was just one of several remarks she made criticizing McConnell by name, something congressional leaders often avoid doing to one another. “Speaking of Mitch, what's gotten into him?" she said, citing his support for letting states declare bankruptcy.

The roughly $2 trillion stimulus bill enacted last month included $150 billion for state and local governments.

But in a follow-up bill that Trump signed Friday providing roughly $480 billion more for small businesses and hospitals, Republicans blocked all of the additional $150 billion that Democrats wanted for state and local governments.

McConnell has expressed strong opposition to providing more money for those governments. On Fox News this week, he cited concerns about the mushrooming national debt and opposition to helping states resolve pension and other problems.

"We’re not going to let them take advantage of this pandemic to let them solve problems they created for themselves,” McConnell said.

McConnell also suggested that states be allowed to declare bankruptcy, which is not currently permitted. His suggestion has drawn criticism from members of both parties because it would jeopardize popular state services and cause their future borrowing costs to soar.

Retiring Rep. Peter King, R-N.Y., tweeted this week that McConnell's suggestion "makes McConnell the Marie Antoinette of the Senate.”

But as administration and congressional bargainers reached a compromise Tuesday on the latest rescue legislation, Trump tweeted about beginning talks over the next round of help. The first item he listed was “fiscal relief to State/Local Governments for lost revenues from COVID 19.”

By Thursday, his message was more mixed.

He told reporters at the White House that “we're always going to help states," but added, “The states that seem to have the problem happen to be Democrat." He added that New York and New Jersey “were in a lot of trouble long before the plague came."

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