States’ Pensions, Pandemic, and Bankruptcy

The Story: 

Senator Mitch McConnell, the majority leader in the US Senate, has expressed skepticism about the idea that the US Treasury should subsidize state governments as the latter struggle with costs imposed by the pandemic. McConnell believes that states that have not properly provided for their own public employees’ pensions would likely use such a bailout, improperly, to correct that mistake.


On March 25 and 27, respectively, the Senate and House created a coronavirus relief and economic security act, which the President then signed. On April 21 and 23, the two bodies approved a follow-up. But the Democratic Party in particular has expressed the view that these bills have been too stingy with regard to aid to the states, which are bearing much of the burden of dealing with the epidemiological crisis. They want another bill to correct this.

The Thing to Know:

In a recent talk show appearance, McConnell said that though he doesn’t want another follow-up pandemic subsidy bill, he would “certainly be in favor of allowing states to use the bankruptcy route.” This remark has caused a furor, and may assist the Democratic Party in McConnell’s home state of Kentucky in its efforts to oppose McConnell’s reelection in November.

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