WASHINGTON –In a letter to House and Senate leadership, the Republican Study Committee (RSC) Budget & Spending Task Force expressed its opposition to any federal bailout of mismanaged state and local governments made under the guise of COVID-19 relief.
The letter, led by Task Force Chairman Rep. Jim Banks of Indiana’s Third Congressional District, garnered support from conservative leaders with Heritage Action for America, FreedomWorks, and Americans for Prosperity.
In the letter, the task force argues “such bailouts would fail to directly address the immediate threat of the pandemic and carry with them a number of perverse incentives and consequences. For instance, they would reward states that have mismanaged their budgets, incentivize future bailouts and reliance on federal funding, invite a bailout of underfunded pensions, fail to push states to enact spending reforms, and feed the Left’s ultimate goal of consolidating power in the federal government rather than empowering states.”
Citing the hundreds of billions of taxpayer dollars currently being directed to COVID-19 relief efforts, the Task Force notes a “direct federal bailout would also ignore the fact that state and local governments already have a variety of fiscal options available to ensure that they can continue to provide essential services to their citizens while also addressing the current pandemic.”
“Hoosier taxpayers should never be on the hook to bail out many years of mismanagement and poor leadership in states like Illinois,” Banks said. “They’ve made promises to workers with pensions and other benefits that they can’t keep. States like Indiana that are fiscally responsible shouldn’t be punished.”