During the Great Recession, tax collections fell so steeply that state and local governments furloughed and laid off police officers and cut aid to key services like health care, transportation and schools. Some cities turned off streetlights to save on electricity, and Hawaii cut its school aid so much that it closed them down altogether on many Fridays.
The current downturn is shaping up to be worse, and bipartisan groups of governors and mayors from around the country have been pleading with Washington for aid to help them keep workers on their payrolls as they grapple with a growing public health and economic crisis.
But Congress did not provide money for state governments in the $484 billion aid package passed by the House on Thursday, after Democrats failed to persuade Republicans to do so, setting up the next political battle over pandemic relief. (States, territories and tribal areas were allocated $150 billion in previous pandemic legislation.)
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Rather than looking for handouts, Mr. McConnell said, states should consider filing for bankruptcy. His aides threw fuel on the fire in a news release that said the Senate leader was opposed to “blue state bailouts,” suggesting it was Democratic-leaning states that were seeking the money to take care of problems caused by fiscal mismanagement.
Mr. Trump gave ambivalent signals about further aid to state governments at his White House briefing on Thursday, suggesting that he might be open to offering it but also echoing Mr. McConnell’s language, which had outraged Democratic governors like Andrew M. Cuomo of New York. “It is interesting that the states that are in trouble do happen to be blue,” Mr. Trump said.
Mr. Cuomo accused Mr. McConnell of hyperpartisanship, calling the “blue state bailout” label “vicious.” and "dumb."
“How ugly a thought,” he said. “Think of what he is saying. People died — 15,000 people died in New York, but they were predominantly Democrats, so why should we help them?”
The National Governors Association, a bipartisan group of governors, wrote federal officials this week pleading for $500 billion to help them make up for lost tax revenues during what they called “the most dramatic contraction of the U.S. economy since World War II.”
The group’s chairman, Gov. Larry Hogan of Maryland, a Republican, told Politico on Thursday that he thought Mr. McConnell would come to regret his remarks. “The last thing we need in the middle of an economic crisis,” he said, “is to have the states all filing bankruptcy all across America and not able to provide services to people who desperately need them.”