Fiscal Policy

Republicans Must Not Cave on Blue-State Bailouts

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Congress shouldn’t reward Democrats’ fiscal mismanagement with more taxpayer money.

Democrats have spent the last few months demanding bailouts for states and local governments. They claim that if you oppose spending hundreds of billions of taxpayer dollars to bail out states such as New York, Illinois, and California, then you support laying off teachers, health-care workers, and first responders.

Guess what? They’re lying. And unfortunately, too many of my Republican colleagues have bought their lie and are getting ready to cave.

What Democrats really want is for Congress to just send money to liberal politicians who have already shown they can’t be trusted with it. If these politicians have budget shortfalls, it’s because they did not prioritize their struggling constituents in the first place, and instead wasted money on other things. New York and California are of course free to burn tax dollars for fun. But they shouldn’t expect Florida and the rest of the country to pay when the bill comes due.

I’ve argued all along that states have the ability to moderate the economic harm caused by the COVID pandemic through reasoned, balanced measures that protect citizens without destroying their economies. States also have taxing authority and the ability to borrow money if their fiscal situations get too dire.

The federal government can play a significant role in boosting the unemployment-insurance program, propping up small businesses to avoid layoffs, and investing in vaccine research, development, and distribution. But it shouldn’t write blank checks to poorly managed states.

Why? Well, first of all, we don’t even know how much of the $1 trillion allocated to states and local governments by the CARES Act has already been spent, and they won’t tell us. I and Senator Ron Johnson (R., Wis.), have written multiple letters to every governor in America asking for a breakdown of how they’ve spent their states’ CARES Act money. Just ten of them have responded. Only in Washington does it make sense to consider sending hundreds of billions of taxpayer dollars to states and local governments that refuse to tell us how, or even if, they’ve used the $1 trillion we sent them nine months ago.

Second of all, unemployment data show that states that have taken steps to responsibly and safely open up their economies are doing better than states that refuse to accept reality and science and stick with unnecessarily strict, destructive lockdowns. Thirty states have halved their unemployment rate since May while real GDP grew 33 percent in the third quarter, erasing losses from the previous quarter. Of the ten states with the lowest unemployment rates, nine are led by Republicans, and none currently have strict COVID lockdowns. Of the ten states with the highest unemployment rates, eight are run by Democrats, and many have stuck with economically ruinous lockdown measures. States have the option to get their economies open and improve their fiscal situations without relying on the federal government for a bailout. Some are just choosing not to.

Lastly, and most importantly, state revenues are up! States across the country are seeing a significant increase in revenue — in some cases, well above projections. As the Wall Street Journal reported, California’s revenue for this fiscal year is almost $10 billion above projections, while New York’s revenue increased more than 4 percent from September of 2019 to September of 2020.

All this is to say that states do not need bailouts; they want bailouts so they can use the money — intended to address the fallout from COVID — to plug the long-standing holes in their budgets and pension systems. It’s as simple as that.

Some of my Republican colleagues on Capitol Hill have bought the Democratic lie that preventing bailouts for liberal states would lead to disastrous consequences. They’re getting ready to capitulate and give hundreds of billions of dollars in taxpayer money to Governors Cuomo and Newsom and Pritzker, all of whom are refusing to open their states, get kids back in classrooms, and get their economies on the road to recovery.

Bailing out those who have done so much damage to their states and our country already would be a boondoggle of epic proportions. We must not let it happen.

Rick Scott is the junior U.S. senator from Florida. He served as Florida’s governor from 2011 to 2019.