Mitch McConnell would rather allow states to declare bankruptcy than receive federal funding
Senate Majority Leader Mitch McConnell said Wednesday he would rather let state governments declare bankruptcy during the coronavirus pandemic than receive more federal funding. He suggested Republicans should oppose additional aid for state and local governments in future coronavirus relief bills.
Under current law, only cities and other local governments can file for bankruptcy, with permissions from their state. The most prominent example is Detroit, which in 2013 became the largest U.S. city to ever declare bankruptcy. It took the city more than a year to exit bankruptcy. McConnell added,"There's not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations."
The historic $2 trillion relief bill Congress passed last month included $150 billion for state and local governments suffering financial devastation from the pandemic. But a new $484 billion bill passed by the Senate on Tuesday included no additional funds for local governments, a provision Democrats unsuccessfully pushed for.
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