Bloomberg: April 22, 2020, McConnell Says He Favors Allowing States to Declare Bankruptcy
Senate Majority Leader Mitch McConnell said Wednesday he favors allowing states struggling with high public employee pension costs amid the burdens of the pandemic response to declare bankruptcy rather than giving them a federal bailout.
“I would certainly be in favor of allowing states to use the bankruptcy route,” he said Wednesday in a response to a question on the syndicated Hugh Hewitt radio show. “It’s saved some cities, and there’s no good reason for it not to be available.”
McConnell, a Kentucky Republican, noted he blocked additional state and local aid in the latest relief package, which passed the Senate Tuesday and is set for a vote Thursday in the House.
The current economic contraction may leave states facing an even worse fiscal crisis than they did a decade ago, which has prompted growing calls from the nation’s states and cites for Congress to provide aid to help them make up for the taxes lost by the nationwide shutdown. Governors have requested $500 billion and cities and counties $250 billion.
