New York's Cuomo to McConnell on state bankruptcy: Watch the market tank
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[April 24, 2020]
By Doina Chiacu
WASHINGTON (Reuters) - New York Governor Andrew
Cuomo on Thursday derided Senate Republican leader Mitch McConnell's
suggestion that states whose finances are depleted by the coronavirus
epidemic could declare bankruptcy as a "really dumb" idea and warned
that financial markets would tank if that were allowed to happen.
Cuomo, a Democrat, was the latest governor to assail McConnell's
suggestion that bankruptcy would be a better route for some states
rather than federal aid, as money is doled out to help buffer the
ravaged U.S. economy.
"This is one of the really dumb ideas of all time," Cuomo said at his
daily news briefing. "Not to fund state and local governments is
incredibly short-sighted.
McConnell, whose Republican Party controls the Senate, on Wednesday
poured cold water on efforts by Democrats to tap federal coffers to
provide assistance to state and local governments.
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Nancy Pelosi, speaker of the Democratic controlled House of
Representatives, has said more money for state and local governments
would be included in the next coronavirus relief package in Congress.
State and local governments fund police and fire departments, teachers,
schools and other services. Allowing states to declare bankruptcy will
hurt, not help, the economic recovery, Cuomo said.
"You wanna see that market fall through the cellar?" Cuomo asked. "Let
New York State declare bankruptcy, let Michigan declare bankruptcy, let
Illinois declare bankruptcy, let California declare bankruptcy? You will
see a collapse of this national economy.
"So just don't," said the governor of the fourth-most-populous U.S.
state.
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![](../images/042420pics/news_u41.jpg)
New York governor Andrew Cuomo speaks in the Manhattan borough of
New York City, New York, U.S., March 30, 2020. REUTERS/Carlo Allegri
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Cuomo accused McConnell of "vicious" partisanship for the
suggestion, since the states hardest hit by coronavirus lean
Democratic. "You want to politically divide this nation now, with
all that's going on?" he asked.
Earlier on Thursday, Michigan Governor Gretchen Whitmer said she was
disappointed to see McConnell's comments on state bankruptcy and
found them "incredibly irresponsible."
"I think this whole business of additional assistance for state and
local governments needs to be thoroughly evaluated," McConnell said
Wednesday on a conservative radio program. "There's not going to be
any desire on the Republican side to bail out state pensions by
borrowing money from future generations."
Whitmer told MSNBC her state was facing a $3 billion hit to its
budget this fiscal year and possibly even a bigger impact next year.
"It will undermine everything from public health to education if we
don't get the kind of support we need out of Washington, D.C.," she
said.
Senate Democratic leader Chuck Schumer said the federal government
must help cities and states or risk "huge mayhem." McConnell's
remarks are so out of the mainstream, Schumer said, "he's going to
have to walk them back."
(Reporting by Doina Chiacu and Tim Ahmann; Editing by Chizu Nomiyama,
Steve Orlofsky and Dan Grebler)
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