Senate Majority Leader McConnell Suggests States Use Bankruptcy Over Coronavirus Aid

Senate Majority Leader Mitch McConnell today announced that state and local governments should be able to “use the bankruptcy route” rather than receive aid from the federal government if their economies are strained due to the coronavirus pandemic.  State and local governments did not receive additional funding in the latest coronavirus aid bill and cannot declare bankruptcy under current laws.

“[W]e’re not ready to just send a blank check down to states and local governments to spend any way they choose to,” McConnell said, adding that “we need to have a full debate not only about if we do state and local, how will they spend it.”

The remarks drew sharp criticism from both Democrats and Republicans. New York governor Andrew Cuomo, whose state has been hit particularly hard by the coronavirus, called McConnell’s statements “irresponsible, reckless” and “one of the really dumb ideas of all time.” Republican Representative Pete King criticized the idea that federal assistance would not be provided for many essential jobs, such as police and healthcare workers.

House Speaker Nancy Pelosi promised a “major package” of aid in the next coronavirus relief bill for state and local governments earlier in the week. At the same time, President Trump also showed his willingness to help out state and local governments as well.