Senate majority leader suggests NY, NJ file for bankruptcy

NEW YORK - As the House reassembles to send President Donald Trump a fourth bipartisan bill to help businesses crippled by the coronavirus, Senate Majority Leader Mitch McConnell, R-Ky., wants to put the brakes on aid to states.

After Tuesday’s Senate vote, McConnell said there would be a lengthy Senate debate on the next package before billions more in spending will move through his chamber.

“We’re going to take a pause here, we’re going to wait ... and clearly weigh before we provide assistance to states and local governments," McConnell said Wednesday on Fox News Channel. “Before we make that decision, we’re going to weigh the impact of what we’ve already added to the national debt and make sure that if we provide additional assistance for state and local governments, it’s only for coronavirus-related matters."

Later, McConnell told The Hugh Hewitt Show that states could consider filing for bankruptcy.

"I would certainly be in favor of letting states take the bankruptcy route," said McConnell.

New York and New Jersey's leaders fired back at McConnell. Speaking during his daily coronavirus briefing, Murphy blasted the Republican senate majority leader.

"Come on, man, that is completely and utterly irresponsible," said NJ Gov. Phil Murphy.

NY Gov. Andrew Cuomo told CNN McConnell's suggestion was "one of the dumb statements of all time."

The almost $500 billion measure being voted on Thursday does not contain aide for states.  Anchoring it is a request by the Trump administration to replenish a fund to help small- and medium-size businesses with payroll, rent and other expenses.

Supporters are already warning that more money will be needed almost immediately for the business-backed Paycheck Protection Program. Battle lines are forming over the next measure amid growing demands to help out state and local governments, the Postal Service and first responders.

Thursday's vote in the House would bring the total cost of the four bipartisan bills to respond to various impacts of the COVID-19 pandemic to about $2.5 trillion, according to the Congressional Budget Office, Washington's impartial scorekeeper.

The bill started two weeks ago as a simple Trump-sought $250 billion replenishment of the oversubscribed payroll subsidy program and grew from there. The payroll program provides forgivable loans so businesses can continue paying workers while forced to stay closed for social distancing and stay-at-home orders.

It also contains $100 billion demanded by Democrats for hospitals and a nationwide testing program, along with a $60 billion set-aside for small banks and an alternative network of community development banks that focus on development in urban neighborhoods and rural areas ignored by many lenders. There's also $60 billion for small-business loans and grants delivered through the Small Business Administration's existing disaster aid program.

Republicans say the delays likely forced some businesses waiting for the payroll subsidies to close. But they are nonetheless sure to back the measure by a wide margin.

The legislation swept through the Senate on Tuesday by voice vote barely hours after being first circulated.

The House, however, will conduct a roll-call vote in which lawmakers will vote in turns taken under social distancing rules. House Speaker Nancy Pelosi, D-Calif., has also orchestrated a vote to establish a select panel to provide oversight of the government's efforts to battle the coronavirus, a move decried by Republicans as playing politics with the crisis.

Supporters of the Paycheck Protection Program warn that this week’s refill may only last a few days, likely putting business groups back at Washington’s doorstep, along with the nation’s governors and the cash-strapped Postal Service.

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Pelosi said in an interview Wednesday on Bloomberg Television that more funding for state and local governments — there’s already $150 billion allocated in last month’s $2 trillion coronavirus package — means support for “the health care worker, the police and fire, the first responders, the emergency services people, the teachers in our schools, the transportation workers who get vital, essential workers to work.”

Trump has said he supports including fiscal relief for state and local government in another virus aid package along with infrastructure projects.

It’s unclear how soon the next bill can advance. There’s also the question of when Pelosi and McConnell feel comfortable reopening Capitol Hill, though Trump has signaled he wants discussions to begin as soon as Congress finishes the current legislation. The Senate is scheduled to return May 4.

Launched just weeks ago, the Paycheck Protection Program quickly reached its lending limit after approving nearly 1.7 million loans. That left thousands of small businesses in limbo as they sought help.

Among the targets for the next bill is the Postal Service, which has more than 600,000 workers, mostly covered under union-negotiated contracts, but is hamstrung financially by COVID-19-related revenue losses and pension-funding requirements.

With the Associated Press