Senators David Perdue and Ron Johnson discuss potential state bailout legislation with Americans for Prosperity

May 8, 2020 by AFP

Americans for Prosperity President Tim Phillips and Chief Executive Officer Emily Seidel spoke with Senators David Perdue and Ron Johnson over a teletownhall last week to discuss why the congressional proposal to send bailouts to the states and localities is a bad idea.

These bailouts, the senators explained, unfairly privilege states whose poor fiscal condition predates the coronavirus pandemic. Meanwhile, states that have historically managed their budgets more responsibly are left footing the bill.

Senator Perdue noted that the federal government’s already-high level of debt makes an additional massive spending bill potentially disastrous.

This is the reality that we have right now. I have a debt clock in my office in Washington. It spends at about $100,000 per second. We had about $23 trillion in debt before COVID-19. We’ve added $2.9 trillion of spending in this relief package that I just outlined.

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I just don’t know how that is possible [to grant these bailouts], frankly, until we [address] the $2.9 trillion that’s already been spent. We had about $1.2 trillion this year in budget shortfall, and so now we’re looking at just the debt, itself … going from $23 trillion to $27 trillion.

Responding to an audience member’s question, Perdue added, “It’s not fair to the states, and to the citizens of these states, to subsidize these other high-tax, high-spending … states. It’s just not right. We have a federalist system.”

Senator Johnson was similarly concerned about the prospect of a state relief package.

No matter how this is allocated, it will be unfair, and so, again, let’s pause. We’ve already allocated $150 billion to the states. It hasn’t been spent. So much of this $2.9 trillion has not been spent. Why are we talking about another $1 trillion? There’s no need.

There’s no rush at this point in time. There was a need for speed a few weeks ago, so we could … prevent markets from seizing up, to help workers, but we’ve got more than enough allocated right now.

Let’s take a pause, let’s evaluate what we’ve done, let’s fix the problems in the first four bills before we even consider allocating one more dollar and mortgage our children’s future further.

Johnson concluded, “This would just be a short-term respite in terms of [the states’] financial distress because they will just continue to do the exact same thing. We would be enabling these states to do it.”

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