WASHINGTON (Reuters) – U.S. President Donald Trump on Monday slammed U.S. cities and states seeking billions of dollars in more federal aid to offset huge losses amid the coronavirus outbreak as lawmakers spar over the next round of potential economic relief along sharp party lines.

Democrats are calling for more aid to help beleaguered municipalities left out of recent stimulus measures. But some Republicans have balked at the price tag, while the Senate’s top Republican said he would back state bankruptcy before giving them more U.S. funding.

“Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking?” Trump, a Republican, tweeted.

Mayors and governors have spent billions in recent weeks as U.S. coronavirus cases topped 960,000 and led to more than more than 54,700 COVID-19 related deaths as of this weekend. Social distancing and stay-at-home orders implemented across most of the nation to curb the spread of the highly contagious virus have also triggered a surge in unemployment, curtailed consumer spending and depressed local tax revenue.

Congress previously allocated $150 billion for governments, but governors have asked for another $500 billion while cities and counties are seeking $250 billion, saying the money is needed to cover the costs of responding to the outbreak as well as revenue lost while residents shelter in place.

Trump, who is seeking re-election in November, appeared to back Senate Majority Leader Mitch McConnell, who last week told a conservative talk-radio host that he “would certainly be in favor” of letting states enter bankruptcy.

But other Republicans, including Maryland Governor Larry Hogan, who chairs the National Governors Association (NGA), and some Republican senators, have backed funding for state and local governments.

Story continues

Democratic governors, including NGA Vice Chairman and New York Governor Andrew Cuomo, have blasted McConnell’s idea, saying their states have an outsized role in filling the nation’s coffers and allowing bankruptcy would upend financial markets.

(Reporting by Tim Ahmann and Doina Chiacu; writing by Susan Heavey; Editing by Chizu Nomiyama and Jonathan Oatis)

Source link