For Mitch McConnell, COVID-19 is an opportunity to destroy any positive services that states and cities provide. It’s also an opportunity to destroy public sector unions. He has the perfect mechanism to achieve these goals–force states and cities to declare bankruptcy.
Senate Majority Leader Mitch McConnell on Wednesday insisted that flailing state and local governments should be able to “use the bankruptcy route” rather than receive aid from the federal government — signaling renewed opposition to a top Democratic demand for the next coronavirus relief package.
In an interview with conservative radio host Hugh Hewitt, the Kentucky Republican also expressed concern about adding billions more to the national debt in addition to the nearly $3 trillion Congress has already sent out the door to combat the economic and public health challenges of the pandemic.
“There’s no good reason for it not to be available,” McConnell said of individual localities declaring bankruptcy in order to stay afloat.
“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,” McConnell added. “That’s not something I’m going to be in favor of.”
States do not have the ability to declare bankruptcy under current law, and modifying the bankruptcy code would likely be a heavy lift in Congress.
The Senate on Tuesday passed a nearly $500 billion “interim” package that included additional funding for a popular small-business loan program, hospitals and expanded coronavirus testing. During the negotiations, Democrats had demanded billions more for state and local governments, citing requests from Democratic and Republican governors alike.
McConnell’s office referred to such funding as “blue state bailouts” in a news release earlier Wednesday, further underscoring that there remains broad GOP opposition to such cash infusions. And McConnell himself said it was no surprise that governors, regardless of political party, “would love to have free money.”
Ah yes, free money to do things like pay for all these expenses they are being forced to bear by the administration not taking control over testing, having to pay for public school teachers, snow removal, police and fire protection, etc. While it’s not clear what a change in bankruptcy law for states would do to union contracts, there’s certainly the strong possibility that the change in the law would allow these contracts to be voided. There’s at least been some decisions on this for municipalities that have busted unions. I know I’d love to have my contract torn up and then take a 50% salary reduction in order so that Mitch can give more money to his rich friends. And it’s not as if Trump himself hasn’t used bankruptcy law to escape union contracts.