GOP lawmaker calls for more help for states: ‘Bankruptcy is not an option’

Republican Rep. Lee Zeldin (N.Y.) said Tuesday that the federal government needs to produce more aid for states whose tax bases have been depleted as a result of the coronavirus pandemic because “bankruptcy is not an option” for states. 

“Maybe some of these governments were cash strapped going into this, I understand that, but this is about survival,” Zeldin said in an interview with The Hill’s Steve Clemons. “Bankruptcy is not an option. Some of these local municipalities are run by Republicans.”

Zeldin represents a state at the epicenter of the coronavirus pandemic. New York has had more than 342,000 cases of the virus and more than 27,000 deaths, according to numbers kept by The New York Times. It has shut down much of the state’s economy and it is unclear when New York City will truly begin to open. 

Many Republicans have been skeptical of providing money to hard-hit states, and President Trump has criticized the calls from some states. Zeldin’s comments on bankruptcy reference controversial remarks from Senate Majority Leader Mitch McConnell (R-Ky.), who suggested it could be an option for states.

Zeldin was part of a group of New York lawmakers who sent a letter to McConnell last month saying “bankruptcy is not the answer.” 

“Some of these local governments were in very sound fiscal shape going into this. But unfortunately, right now, because of both the hits on the revenue side and the expenditure side, they need help,” Zeldin said Tuesday.

House Democrats on Tuesday unveiled a $3 trillion coronavirus relief package that includes $915 billion for state, local, territorial and tribal governments. The bill is seen as dead on arrival in the Senate, but is expected to be a focal point of talks on a new bill.

Republicans argue giving money to states serve as a bailout for Democratically-controlled states that have made poor financial decisions that predate the pandemic.