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Senate Majority Leader Mitch McConnell

Photo by Gage Skidmore/ CC BY-SA 2.0

Senate Majority Leader Mitch McConnell's refusal to provide coronavirus relief to cities and states facing massive budget shortfalls due to the pandemic could deal a devastating blow to the economic recovery, leading to millions of job losses.

Moody's Analytics told the Wall Street Journal on Wednesday that if Congress does not agree to give more aid to cities and states, the economy would contract by three percent and more than four million jobs could be lost.

The coronavirus relief package Senate Republicans introduced last month did not initially include new aid for cities and states. But since releasing the initial coronavirus relief package, Trump administration negotiators have said they are willing to give $150 billion in aid to cities and states.

However, that is far short of the $500 billion in losses Moody's estimated will be lost over the next two fiscal years.

House Democrats passed a relief bill on May 15 that would provide $915 billion for state and local relief.

But McConnell has refused to consider the Democratic bill and has been digging in his heels when it comes to helping cities and states, who have seen tax revenue fall off a cliff as businesses shuttered thanks to the coronavirus.

McConnell has characterized aid to state and local governments as a "Blue State Bailout," and told Fox News on Tuesday he wants to take any possibility for providing more aid to states "off the table."

On Monday, Trump tweeted that congressional Democrats, "only wanted BAILOUT MONEY for Democrat run states and cities that are failing badly."

That is not true.

Republican-run states are also facing budget shortfalls thanks to the pandemic — and they're also asking for more money.

The Journal reported that Louisiana, which has a GOP-controlled legislature, is facing a 46 percent decline in revenue thanks to the coronavirus. Louisiana's Republican Sen. Bill Cassidy is asking for $500 billion for states and local governments, $350 billion more than the current GOP offer.

Negotiations on the relief bill are currently stalled, and it's unclear when they will resume.

Trump chief of staff Mark Meadows, one of the administration officials negotiating a potential deal, is out on vacation for the week.

Published with permission of The American Independent Foundation.

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