Cuomo jabs at McConnell over state bankruptcy: ‘I dare you to do that’

New York Gov. Andrew Cuomo (D) on Friday fumed over Senate Majority Leader Mitch McConnell’s support for allowing states to declare bankruptcy amid the coronavirus, daring the GOP leader to pass a law allowing for states to do so.

Cuomo, during a press conference, reiterated that he believed allowing states to declare bankruptcy is “a really dumb idea.”

“The suggestion was made, states should declare bankruptcy . …You want to send a signal to the markets that this nation is in real trouble? You want to send an international message that the economy is in turmoil? Do that,” Cuomo said.

NEW: NY Gov. Andrew Cuomo dares Mitch McConnell to pass bill allowing states to declare bankruptcy and get Pres. Trump to sign it.

“You want to send a signal to the markets that this nation is in real trouble?…I dare you to do that.” https://t.co/sjbmPt7KIv pic.twitter.com/nStytx0Gii

— ABC News (@ABC) April 24, 2020

“So to the [senator] that proposed it, pass a law allowing states to declare bankruptcy. I dare you. And let the president sign that bill. … Your suggestion, Sen. McConnell, pass the law, I dare you. And then go to the president and ‘say sign this bill allowing states to declare bankruptcy.’ … I dare you to do that,” Cuomo added.

McConnell has sparked bipartisan backlash after he said in response to a question from radio host Hugh Hewitt that he would support allowing states to declare bankruptcy.

“I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities. And there’s no good reason for it not to be available. My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of,” McConnell said.

State and local governments are warning that they face severe budget holes as businesses have scaled back or closed due to the coronavirus, depriving them of a tax base.

The National Governors Association, which is led by Maryland Gov. Larry Hogan (R) and Cuomo, is asking Congress for an additional $500 billion for state and local governments.

Unlike the federal government, state governments, except for Vermont, have a balanced budget requirement. They are also not allowed to declare bankruptcy.

But there’s no indication that McConnell is preparing legislation, as Cuomo suggested, that would allow states to declare bankruptcy.

A GOP leadership aide noted that McConnell’s remarks were in response to Hewitt, who raised the issue of states being able to declare bankruptcy, and not a signal of GOP strategy going forward.

Congress included $150 billion for state and local governments in last month’s $2.2 trillion coronavirus relief bill. But a $484 billion bill passed this week did not include additional funding for states after GOP senators warned that trying to include it would prevent the legislation from passing the Senate without a roll-call vote.

McConnell warned, during the interview with Hewitt, that any additional help for state and local governments would have to be “thoroughly evaluated” by Senate Republicans.

“There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations,” McConnell said, after Hewitt floated Illinois, California and Connecticut as examples of states that he said had overly generous benefits for public employees.

Congressional Democrats are calling for more aid to be included in the next coronavirus relief bill, something President Trump and Treasury Secretary Steven Mnuchin have suggested they are open to.

McConnell, however, has called for a “pause,” saying that he did not expect another coronavirus relief bill to pass until the Senate returns as soon as May 4.

In the meantime, he has said, lawmakers should evaluate what is working under the nearly $2.8 trillion appropriated by Congress, and what programs are not.