Senate Majority Leader Mitch McConnell continues to prevent COVID-19 relief because he insists that big business needs to be let off the hook for endangering and potentially killing their workers and customers. That's the poison pill he insists on being in any package. But that's not his only demand: He also wants to prevent state and local governments from getting any further assistance—that "blue state bailout" that he talked about last spring and summer before he gave up that framing. Now he just refuses to allow it, but without the incendiary language to justify his obstruction. As the bipartisan negotiations for help teeter because of McConnell's intransigence, states are trying to save small businesses on their own while at the same time bleeding jobs.
"We have done what we can do to pump money into small businesses so that people can continue to work," Gov. Mike DeWine of Ohio, a Republican, told The New York Times. "From the jobs point of view and the economy point of view and the workers' point of view and small businesses, we've got to get that help from the federal government. That's the only place we can get it." Colorado's legislature held a special session last week to scrape together emergency economic assistance to small businesses. They came up with $57 million for a grant program for small businesses, while California has established a "rebuilding fund" that will back loans for the smallest businesses, those not served by what Congress has done so far.
Some of the states still have funds from the $150 billion Congress provided to states for a response to the pandemic in the $2.2 trillion CARES Act last spring. They've seen no new money from the federal government since. Because McConnell doesn't want them to have it. He's pointed to the fact that all that money hasn't been exhausted, which is true. That's in part because of the initial restrictions placed on the funds and also because states have been more or less hoarding it because no new money has been forthcoming. Which means the states—which can't run budget deficits—have inadequate resources to save themselves and small businesses.
Even the arch-conservative National Federal of Independent Business (NFIB) is raising an alarm. It released a survey this week showing businesses losing hope and uncertainty increasing along with coronavirus cases. With every business failure, state and local government take a hit from the revenue they would have gotten in taxes, both business taxes and income taxes from the employees who are being laid off—and need unemployment insurance from the state. "It becomes almost a death spiral if you can’t keep these businesses running," said Tim Goodrich, executive director of state government relations for the NFIB.
That's the death spiral McConnell seems to be egging on. A destroyed economy will hurt Joe Biden's presidency. It might help Republican prospects in 2022 and 2024. That's all that matters to the Grim Reaper.
Posted with permission from Daily Kos.