Paul L. Caron

Friday, April 17, 2020

What The States Need From Congress Now Is Cold, Hard Cash

Time op-ed:  What the States Need From Congress Now Is Cold, Hard Cash, by Daniel Hemel (Chicago), Ruth Mason (Virginia) & Gladriel Shobe (BYU):

CoronavirusSince the early days of the COVID-19 crisis, Americans have looked to their elected officials for guidance and comfort. And with President Trump passing the buck to states, governors have–for the most part–risen to the occasion. Several, including New York’s Andrew Cuomo and Ohio’s Mike DeWine, have emerged as inspiring national leaders, foils for the President’s lies and bluster. Polling shows that 72 percent of Americans approve of their governor’s COVID-19 response, compared to only 45 percent who say the same of the president.

But the governors we have come to rely on in this public health emergency now confront a crisis of a different sort: their states are running out of money. The Cuomo Administration warned last month that New York could face a $15 billion funding gap, while DeWine called on state agencies to slash spending by up to 20 percent in anticipation of Ohio’s shortfall. Even states with relatively few COVID-19 cases, like Hawaii, expect tax collections to shrivel.

Congress must fill the void. The latest and largest of the three COVID-19 relief packages so far included $1,200 rebates for most U.S. adults but only a tangle of targeted assistance programs for states. What states need now, though, is exactly what U.S. households need: cold, hard cash–with no strings attached–to pay their bills and keep the lights on.

We suggest a simple approach: Give each state a fixed amount of cash per resident per month—we suggest $150—until normal economic activity can resume. This easy-to-implement approach would limit opportunities for pork-barrel politics, save states from insolvency and bolster the national economy.

It’s our governors who have guided us through this crisis, and ultimately it will be our governors who guide us out. We have put our trust–and our lives–in their hands. Now it’s time we give them and their states the resources they need to lead us through.

For complete TaxProf Blog coverage of the coronavirus, see here.

Coronavirus, Tax, Tax News | Permalink


Hate to be the cold hearted economist, but maybe it wasn't worth shooting our economy in the foot just to increase the COVID-19 survival rate from 99.2% to 99.8%. Particularly when our youngest and healthiest individuals are not dying from this disease with any meaningful frequency and most of the .6% we're saving through these measures will die anyways in the next three to five years. I like Sweden's libertarian approach. Never thought I'd write those words in a sentence.

Posted by: Anon | Apr 18, 2020 2:37:57 PM

The left in 2019: Trump is a fascist. The left in 2020: Where’s Trump when we need him?

Posted by: Mike Livingston | Apr 17, 2020 3:22:49 AM