Koch-backed group petitions Congress to say no to state bailouts

The political arm for the network of groups led by Charles Koch sent a letter to congressional leaders in both parties on Thursday asking them to reject requests from states seeking federal money for budgetary shortfalls that are unrelated to the coronavirus pandemic.

“We should be helping the people who are hurting, not bailing out politicians for irresponsible decisions they made prior to this crisis,” wrote Brent Gardner, the chief government affairs officer for Americans for Prosperity. “But as we’ve seen before, lawmakers are using this crisis to jockey for handouts to pay for their past mistakes in the name of helping those who have been hit hardest.”

The letter, which was also signed by leaders of the Koch-backed groups Concerned Veterans for America and The Libre initiative, was sent to Speaker Nancy Pelosi (D-Calif.), House Minority Leader Kevin McCarthy (R-Calif.), Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Charles Schumer (D-N.Y.).

In addition to the letter, AFP will run digital ads linking to a petition and encourage its activists to reach out to Congress on the issue. AFP President Tim Phillips will discuss the matter with Sens. David Perdue (R-Ga.) and Ron Johnson (R-Wis.) at a tele-town hall event on Thursday night.

AFP is making the case to Congress that some states seeking bailout money are using the coronavirus as an excuse to address “chronic structural fiscal problems” that existed before the outbreak.

“States that have spent lavishly, borrowed excessively, and ignored looming pension debt should not use the current crisis to shift the cost of those bad policy decisions onto taxpayers in other states,” the letter states.

“Nor should they exploit firefighters, teachers, and other state workers to justify these bailouts. Public servants should not be treated as pawns in these negotiations. States should honor their obligations to those workers by making them priorities for the funds they have and have already received. They should not be exploiting them as bargaining chips to seek massive federal bailouts.” 

The letter points specifically to Illinois, which has received nearly $5 billion in federal funds this year through legislation passed by Congress to shore up coronavirus-related budgetary shortfalls.

Illinois officials have been criticized for requesting an additional $41 billion from the federal government to address a gap in the state’s pension system.

President Trump has mused about providing additional relief to the states but has said that the money must only be allocated for shortfalls that stem directly from the coronavirus shutdown.

“I think there’s a big difference with a state that lost money because of COVID and a state that’s been run very badly for 25 years,” Trump said last week. 

McConnell has been cold to the idea of additional money for state governments, provoking a firestorm of controversy last week for saying that states facing budget shortfalls amid the pandemic should be able to “use the bankruptcy route.”

“Taxpayers in one state should not be on the hook for politicians’ inability to make responsible decisions in another state prior to the COVID crisis,” the AFP letter states. “Our system of government reserves certain authority and accountability to each of the states. Bailouts are a clear example of the federal government overstepping its authority. It is incumbent on states to govern wisely and independently, both reaping the rewards of smart policy, and addressing the consequences of bad.”