President Trump is facing a growing rift with Senate Republicans who are siding with Democrats on the need to provide hundreds of billions of dollars in emergency aid for states and cities that have lost tax revenue during the coronavirus pandemic to pay for first responders and other basic expenses.
Republican Sens. Lindsey Graham of South Carolina and Marco Rubio of Florida said they are inclined to provide more aid to states, despite the president warning that he opposes giving more money to states that have been “mismanaged” by Democrats.
“No doubt states have been hit pretty hard,” Mr. Graham told reporters at the Capitol. “If it were set up the right way, I think it makes sense.”
Mr. Rubio said on Twitter that Congress will “have to provide additional assistance to state & local governments.”
“Federal taxpayers shouldn’t have to pay for pre-Covid19 spending decisions that are irresponsible,” Mr. Rubio tweeted. But he said there is “a baseline of spending on essential government services which we can’t have collapse.”
Sen. Bill Cassidy of Louisiana is another Republican lawmaker who is outspoken about the need to provide more aid to states, suggesting a formula to allocate funds based partly on how hard the virus has hit a given state.
But Sen. Ted Cruz, Texas Republican, said he prefers giving states more flexibility on how they can spend aid that was already approved and said Congress shouldn’t bail out Democratic-controlled states for wasteful habits that preceded the pandemic.
“Illinois’ unfunded pension liability is $241 billion,” Mr. Cruz said on CNBC. “That was caused by politicians that were just buying votes, and they were buying votes by making commitments to the public employee unions that they didn’t have the revenue to sustain. I don’t see any reason why Texas should pay higher taxes to bail out states that have been irresponsible, so I think that is going to be a major issue of disagreement in the Senate.”
New York City Mayor Bill de Blasio said cities and states can’t reopen for business if they can’t pay for essential services. He said his city has lost $7.4 billion and will need to lay off municipal workers without a federal bailout.
“Right now, what I’m staring down the barrel of and cities and states all across the country, people are either acting on furloughs and layoffs or preparing for furloughs and layoffs of the exact people who have been heroes in this crisis, who we should be celebrating and supporting — the first responders, the health care workers, the educators,” he said on CNN.
Congress and the president already have approved nearly $3 trillion, including some money for states, in three packages of relief for laid-off workers and businesses closed during the outbreak. House Speaker Nancy Pelosi is pushing for $1 trillion for states and cities in a fourth round of emergency aid.
The president vowed on Sunday, “We’re not doing anything unless we get a payroll tax cut.”
Mrs. Pelosi responded with two words: “No way.”
The debate over another round of federal aid intensified as the payroll company ADP reported Wednesday that 20.23 million private-sector workers lost their jobs in April. Payroll losses for March were revised to 149,000, from 27,000.
“The jobs numbers are very, very chilling,” Kevin Hassett, a White House economic adviser, said on Fox Business Network. “This is the biggest shock that our economy has ever seen, but it’s something that we’ve done in order to get ahead of the curve on the disease. So it’s something that we can reverse hopefully relatively quickly.”
The Department of Labor on Friday will release its April jobs report, showing the unemployment rate and how many jobs were lost.
Mr. Trump told reporters he’s not concerned about massive unemployment hurting his reelection prospects, saying people understand the shutdowns were needed to slow the spread of the virus.
“Nobody’s blaming me for that,” the president said. “I built the greatest economy … and I’m going to rebuild it again. This was an artificially induced unemployment.”
He said the pandemic, which originated late last year in China, has hit the U.S. economy worse than the Sept. 11, 2001, terrorist attacks.
“We went through the worst attack we’ve ever had in our country,” the president said. “It could have been stopped in China. This is worse than the World Trade Center. This is worse than Pearl Harbor. And it should have never happened.”
He acknowledged risks in reopening the country before a vaccine is developed but said “the country won’t stand” for closures any longer.
“I don’t think people will stand for it,” Mr. Trump told reporters in the Oval Office. “It’s not sustainable.”
Asked whether Americans need to accept that reopening will bring more deaths, Mr. Trump replied that “it could very well be the case.”
“We have to be warriors,” Mr. Trump said. “We can’t keep our country closed down for years … hopefully that [more deaths] won’t be the case.”
During a webcast discussion hosted Wednesday hosted by Sen. Pat Toomey, Pennsylvania Republican, a panelist said he is concerned that easing restrictions now will lead to a much higher death toll for more than a year.
“The numbers are uncertain, but my sense is that the infection fatality rate is about half a percent lower than we thought before,” said Paul Romer, a professor of economics at New York University and a 2018 winner of the Nobel Prize in economics. “But if this virus spreads to the population and infects 60%, which is at the lower bound … of most people’s estimates … then we’ll have about a million deaths.”
He said the lockdowns in various states were ordered to keep from overwhelming hospitals.
“So if we’re going to have a million deaths, we will probably want to keep restricting things so that we don’t get more than about 2,500 deaths a day,” he said. “But then if you do the math, that means we’ll be facing this high rate of death for 400 days, more than a year. My guess is that this is going to have a significant depressing effect on economic activity.”
White House press secretary Kayleigh McEnany said the U.S. has one of the lowest mortality rates in the world from the virus, 218 deaths per million people. She compared it with Spain, at 548 per million, and Italy at 485 per million.
“This country is in a place where, because of the American people, we have escaped that 2.2 million [projection of deaths] because of the extraordinary social distancing effort,” she said.
The president also hosted Iowa Gov. Kim Reynolds, a Republican, to discuss meat shortages and her state’s efforts in keeping open meat-processing plants, where as many as 58% of workers have become infected. Ms. Reynolds reported to the president that her state has “turned the corner” in the battle and that only one Iowa meatpacking plant is shut, in Waterloo.
“We’re at reduced capacity,” she said, adding that a Tyson’s plant in Perry is at 60% of capacity and had begun “extensive testing” last week.
“We’ll have most of our facilities up and going. And so as we continue to keep them up and processing, we’re going to hopefully prevent a really sorry situation where we were euthanizing some of our protein supply and really impacting the food supply, across the country but throughout the world,” Ms. Reynold said. “This is critical infrastructure is an essential workforce.”
Agriculture Secretary Sonny Perdue pledged that the nationwide meat-packing industry would be “fully back up” within 10 days.
Mr. Trump signed an executive order last week aimed at keeping meat-processing plants open during the crisis.
Asked about a reported meat shortage at the Wendy’s fast-food chain, Mr. Trump responded: “I’m going to call Nelson Peltz,” the company’s non-executive chairman of Wendy’s, adding that he’s confident the problem will go away.
Vice President Mike Pence said the administration has “two equal goals” — the safety and health of the workforce and ensuring “there’s strength in our food supply and getting people back to work.”
The governor echoed Mr. Pence’s view.
“We’re providing them the confidence of a safe environment, but at the same time we’re making sure that the food supply chain is moving and that the country is being fed,” she said.