Trump says N.J. and N.Y. had problems ‘long before the plague came’

Posted Apr 23, 2020

President Donald Trump, who has boasted of his close working relationship with Govs. Phil Murphy and Andrew Cuomo, took a shot Thursday at the two states hardest hit by the coronavirus.

Trump raised the issue during a discussion of whether he would back more federal aid for states and localities hard hit by the pandemic, which has shut down businesses, forced people to stay at home, and sharply reduced the flow of tax revenue.

“New York and New Jersey were in a lot of trouble long before the plague came,” the president said during his daily coronavirus press conference.

Trump, a Republican, mentioned New Jersey and New York after first claiming that the states with the most severe fiscal problems happened to be run by Democrats.

“It is interesting that the states that are in trouble do happen to be blue,” he said.

The head of the National Governors Association, which has led the fight for more money, is a Republican, Larry Hogan of Maryland.

New Jersey and New York are among the states that send billions of dollars more to Washington than they receive in services, according to the State University of New York’s Rockefeller Institute of Government.

New Jersey taxpayers got 90 cents back for every $1 in taxes. New York got 91 cents.

And those states were among the hardest hit by Trump’s 2017 tax law, which capped the federal deduction for state and local taxes at $10,000, increased the federal deficit by $2 trillion over 10 years and, according to the Congressional Research Service, had little impact on wages or economic growth.

The state subsidized the most was Kentucky, which got $2.41 back for every $1 in federal taxes, according to the Rockefeller Institute report.

It was Kentucky’s senior U.S. senator, Majority Leader Mitch McConnell, a Republican, who claimed that the states wanted more aid so they could fix their broken pension systems and suggested they go bankrupt instead.

“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 on Wednesday.

As an alternative, he said he would “certainly be in favor of allowing states to use the bankruptcy route.”

Trump declined to criticize McConnell’s comments, even as he said he would work to provide some kind of assistance for states in the next stimulus bill.

“A lot of people understand very well what Mitch is saying and they also understand the other side of the problem,” Trump said.

U.S. Sen. Robert Menendez, D-N.J., said McConnell’s remarks were “illogical, immoral and downright dangerous.”

“Our states did not choose to face this deadly pandemic," Menendez said. “Telling our states to throw in the towel and go bankrupt in the middle of a pandemic puts countless lives at risk and is a prescription for catapulting our nation into a full-blown depression.”

Meanwhile, Murphy noted the last time a New Jersey city declared bankruptcy was 1938, which he said shows how it’s not a common route.

“We’re not gonna go bankrupt,” the governor said during his radio show Thursday. “But we’ll have no other choice but to gut the living daylights out of our budgets.”

“Let’s not shrink," Murphy added. "Let’s be as big as the challenge before us. Please, God, we need help, and we need help from Washington.”

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