Sen. Cruz, Colleagues to President Trump: Reject State Bailouts
by Ted Cruz on May 1, 2020 at 12:48 PM
U.S. Sens. Rick Scott (R-Fla.), Ron Johnson (R-Wis.), Mike Lee (R-Utah), Mike Enzi (R-Wyo.) and I sent a letter to President Donald Trump urging the Administration to reject states' efforts to receive taxpayer dollars for non-coronavirus related expenses, particularly bailouts for underfunded pension plans.
In the letter, we wrote:
"Americans expect that their tax dollars will be used for Coronavirus response, not to backfill decades of bad fiscal policy. As we continue to work to help families across the nation, we respectfully ask that you to oppose bailouts for states.
"America has faced many crises throughout our history - crises that demanded difficult decisions. Coronavirus is no different. Government at every level must work together to spend taxpayer dollars wisely to end the Coronavirus crisis."
The letter can be read here and below.
April 30, 2020
The Honorable Donald J. Trump
The White House
1600 Pennsylvania Avenue NW
Washington, D.C. 20500
Dear Mr. President:
We write to thank your administration for taking bold steps to combat the Coronavirus and keep Americans safe. As our efforts to respond to - and ultimately defeat - the Coronavirus continue, state and local governments are at the front lines of this war. They are working tirelessly to protect our communities - an enormous task in this difficult time, and have received federal funding through the CARES Act specifically directed to aid in their efforts to keep families safe.
Unfortunately, we are hearing reports that some states and localities are advocating that a potential future Coronavirus response measure be used as a piggybank for unrelated expenses that have nothing to do with responding to the Coronavirus. As your administration works with Congress on any additional phases of Coronavirus response, we urge you to reject efforts by some states to use federal tax dollars for reasons unrelated to combatting Coronavirus. We believe additional money sent to the states for "lost revenue" or without appropriate safeguards will be used to bail out unfunded pensions, reward decades of state mismanagement, and incentivize states to become more reliant on federal taxpayers. Again, we are supportive of funding to respond to the Coronavirus and protect our frontline workers, but we cannot allow states and localities to get a blank check from American taxpayers to fund areas of their budget that have nothing to do with the Coronavirus.
States like New York are calling for billions in unrestricted aid - not just money for Coronavirus recovery, but for pre-existing state programs and debts. New York's rainy day fund is one of the lowest in the nation, and the state owes over $450 billion in unfunded pension and post-employment benefits. Other states are in even worse shape. Illinois has already requested a $40 billion bailout, most of which would go to pension and budget shortfalls caused by decades of fiscal mismanagement.
And let's not forget, this year's federal budget deficit will be the largest in the history of our nation, in excess of the cumulative deficits for the first 200 years of our country's existence. We will end the year with in excess of $25 trillion in federal debt.
Americans expect that their tax dollars will be used for Coronavirus response, not to backfill decades of bad fiscal policy. As we continue to work to help families across the nation, we respectfully ask that you to oppose bailouts for states.
America has faced many crises throughout our history - crises that demanded difficult decisions. Coronavirus is no different. Government at every level must work together to spend taxpayer dollars wisely to end the Coronavirus crisis.