The White House on Sunday put some distance between the administration and Senate Majority Leader Mitch McConnell’s recent suggestion that states should be allowed to go through the bankruptcy process.
“I’m just an economist, but it feels like the Constitution doesn’t really allow states to declare bankruptcy,” White House economic adviser Kevin Hassett said on ABC’s “This Week.”
“I think that a state going bankrupt is not something that’s really been anticipated by the founders,” he said. “I didn’t see the clip from Sen. McConnell but I’m not sure exactly what he was talking about.”
On “Fox News Sunday,” Treasury Secretary Steven T. Mnuchin was asked a multi-part question about whether President Trump supports giving additional money to states and localities amid the coronavirus outbreak and what the economic effect would be if major states declared bankruptcy.
Mr. Mnuchin said the president is open to additional state money and did not answer the question about bankruptcy.
Mr. McConnell last week said he would be in favor of allowing states to go through the bankruptcy process, saying the federal government can’t be offering get-out-of-jail-free cards for overextended pension programs and other financial distress that might have predated the coronavirus.
The remarks have prompted stiff pushback from both parties.
Maryland Gov. Larry Hogan, a Republican who chairs the National Governors Association, said on Sunday he thinks Mr. McConnell is going to regret his remarks.
“I think it just slipped out,” Mr. Hogan said on “This Week.” “But I’m hopeful that we will be able to convince Sen. McConnell to go along with the bipartisan bill in the Senate and the administration’s commitment to help the states in that final stimulus package.”
