New York Gov. Andrew Cuomo was joined in a telephone news conference Monday by Kentucky Gov. Andy Beshear to try to put pressure on Congress to finally resolve a stalemate over a federal aid package for cash-strapped states affected by the coronavirus pandemic.
Democrats who lead the House and Republicans who control the Senate have so far not been able to agree on details of a fourth bailout plan. Democrats want $1 trillion for states and local governments whose budgets have been decimated by the pandemic, but the GOP has been resisting that.
Cuomo said New York has a combined two-year deficit of $30 billion. He said while Democratic states were among the first to be hit hard by the virus, now many Republican-led states are at the epicenters of the disease.
“This originally started as more of a blue state problem when COVID began. It was a New York, it was a California, it was Illinois, it was Michigan, so it was a blue state problem,” Cuomo said. “That's no longer true. It's now a blue and red problem. Texas, Florida, etc. States have expended a lot of money to deal with COVID. States have seen significant economic loss because of COVID and they have serious financial issues."
Democrats in Congress would also like to extend the additional $600 a week in unemployment benefits for Americans who are out of work. That program ended July 31. The GOP Senate has proposed that the unemployed receive an extra $200 a week.
Over the weekend, President Donald Trump stepped in and issued an executive order that would provide $400 a week. But states would have to finance a quarter of that amount. The president’s plan does not include any money to help states and local government close their deficits.
Cuomo said if the order is carried out, it would cost New York around $4.2 billion between now and the end of the year and “make a bad situation worse.”
“We started with a $30 billion hole, and your solution is to cost me another $4 billion?” Cuomo said. “That's handing the drowning man an anchor. ‘Hold onto this, maybe it'll help.’ No, an anchor does not help a drowning man.”
Also on the call was Beshear, who, like Cuomo, is a Democrat and the son of a former governor. Kentucky is also the home state of Senate Majority Leader Mitch McConnell. McConnell earlier this year suggested that states that lost revenue due to the pandemic should declare bankruptcy.
While Cuomo has often sparred with McConnell and Trump, Beshear said he is not criticizing either, and he believes the president meant well by issuing his executive order. But Beshear agreed that it’s not workable.
He said ultimately, the best course is for Congress to reinstate the temporary $600 a week unemployment benefit. He said out-of-work Kentuckians spent that money on needed goods and services, which helped the economy.
“Our question now is, do we want this economic recession to be a short-term recession, which I believe it can be -- one where we can bounce back as we come out of this virus -- or do we fail to take the steps that we need to take, and our recession goes longer and possibly turns into a depression?” Beshear asked.
Cuomo predicted there will be legal challenges to the president’s executive orders, which also include a deferral of payroll taxes until the end of the year.
Congress is expected to end its summer session, which has already been extended, by the end of this week.
Later in the day, Cuomo, who is chair of the National Governors Association, issued a statement with the group’s vice chair, Arkansas Gov. Asa Hutchinson, a Republican. In it, the governors said they “appreciate” the White House proposals, but “are concerned by the significant administrative burdens and costs this latest action would place on the states.”
They said the association has asked the federal government for months for $500 billion in unrestricted aid.
“It is essential that our federal partners work together to find common ground to help restore our nation's health and protect our economy," Cuomo and Hutchinson wrote.