Dems’ Slush Fund Helps Gavin Newsom Propose Paying Off Californians And Illegal Aliens With Money From Taxpayers In 49 Other States

The Treasury Department Announced This Week It’s Handing Out Money From The Democrats’ Massive Stimulus Bill To States With Little To No Revenue Shortfalls, Which The Dem Governor Of California Wants To Use To Hand Out Checks In Advance Of His Recall Election

“The Biden administration will begin sending $350 billion in aid to state and local governments this month … White House and Treasury officials said on Monday.” (“The Biden Administration Will Begin Disbursing $350 Billion In State And Local Aid This Month.,” The New York Times, 5/10/2021)


California Reported It Has A $76 Billion Budget Surplus, Yet The State Will Receive $26 Billion In Federal Stimulus Funds, And Democrat Gov. Gavin Newsom, Facing A Recall Election This Year, Immediately Announced This Windfall From Taxpayers In Other States Would Be Given Out To California Residents, Including Illegal Immigrants

“California expects a staggering $75.7 billion surplus despite a year of pandemic closures — an amount that surpasses most states’ annual spending and prompted Gov. Gavin Newsom on Monday to propose sending cash back to residents as he faces a recall election. California’s coffers are bulging thanks to the high-flying Silicon Valley, surging stock market and a large share of professionals who were able to continue working remotely during Covid-19. … California is due to receive $26 billion in direct federal aid, and Newsom has included that amount in a $100 billion package he’s dubbing the ‘California Comeback Plan’ as he campaigns against the recall.” (“California Has A Staggering $75.7B Budget Surplus,” Politico, 5/10/2021)

“The plan would build on a previous program distributing $600 checks to qualifying low-income residents by expanding eligibility to the middle class. Two out of three Californians would receive a check of at least $600, with families with children receiving an additional $500…. The Democratic governor is seizing on an unprecedented $75 billion operating budget surplus, fueled by a surging economy and capital-gains taxes, to greatly expand the state’s role in the recovery just as he is facing a potential recall election later this year.” (“California Governor Proposes $100 Billion Recovery Package,” Bloomberg News, 5/10/2021)

Newsom’s Proposal Would Explicitly Include Payments To Illegal Immigrants

“Newsom, who will likely face a recall election later this year, announced a plan to send billions of dollars back to taxpayers. If approved, the state would give $600 checks to workers who earn up to $75,000 annually, with $500 bonuses for tax filers with dependents and undocumented families.” (“Facing A Recall And A Massive Surplus, Gov. Newsom Proposes More Stimulus Checks,” NPR, 5/10/2021)

“The proposal calls for $600 stimulus checks for eligible Californians. Families with children would get an additional $500. The plan breaks down this way: $600 direct payments to all taxpayers who make up to $75,000 a year who did not receive a first payment; Additional $500 in direct payments to families with dependents; Additional $500 in direct payments to undocumented families” (“Am I Eligible For The Proposed $600 Stimulus Checks In California? What You Need To Know,” Los Angeles Times, 5/10/2021)


At The Beginning Of The Year Leader McConnell Repeatedly Explained That Democrats’ Bailout Of State Governments Was Out Of All Proportion To States’ Actual Needs

SENATE REPUBLICAN LEADER MITCH McCONNELL (R-KY), February 4th“[E]xperts agree the remaining damage to our economy does not require another multi-trillion-dollar, non-targeted band-aid…. It will not serve Americans to pile another huge mountain of debt on our grandkids for policies that even liberal economists say are poorly-targeted to current needs. … This is no time to send wheelbarrows of cash to state and local governments that they simply, factually, do not need…” (Sen. McConnell, Remarks, 2/04/2021)

SEN. McCONNELL, February 24th: “Then there’s the $350 billion bailout for state and local governments, many of whom have already seen revenues and receipts rebound. It’s several multiples of any sober estimate of actual need.” (Sen. McConnell, Remarks, 2/24/2021)

SEN. McCONNELL, March 2nd: Democrats are “sending $350 billion to bail out long-mismanaged state and local governments, multiple times the expert estimates of COVID needs.” (Sen. McConnell, Remarks, 3/02/2021)

SEN. McCONNELL, March 5th: “This isn’t a pandemic rescue package. It’s a parade of left-wing pet projects that they are ramming through during a pandemic. … A massive cash bailout for mismanaged state and local governments, multiple times the size of COVID needs...” (Sen. McConnell, Remarks, 3/05/2021)


And Sure Enough Many States ‘Ended Up Collecting Nearly As Much Revenue In 2020 As They Did In 2019’

“Democrats have argued … that states face dire fiscal consequences without aid, and included $350 billion in relief for state and local governments in President Biden’s $1.9 trillion federal stimulus bill, which narrowly passed the House this past weekend…. As it turns out, new data shows that a year after the pandemic wrought economic devastation around the country, forcing states to revise their revenue forecasts and prepare for the worst, for many the worst didn’t come…. By some measures, the states ended up collecting nearly as much revenue in 2020 as they did in 2019. A J.P. Morgan survey called 2020 ‘virtually flat’ with 2019, based on the 47 states that report their tax revenues every month … A researcher at the Urban-Brookings Tax Policy Center, a nonpartisan think tank, found that total state revenues from April through December were down just 1.8 percent from the same period in 2019. Moody’s Analytics used a different method and found that 31 states now had enough cash to fully absorb the economic stress of the pandemic recession on their own.” (“Virus Did Not Bring Financial Rout That Many States Feared,” The New York Times, 3/01/2021)

  • “Most state tax collections plunged last spring when shutdown orders started and millions were thrown out of work as businesses closed. That prompted many states to issue doomsday forecasts, lay off workers and turn to Washington for billions of dollars in aid to replace revenue they were expecting to lose. Many feared a replay of the Great Recession … But this time, after falling 4 percent over all, [Brookings Institution economist Louise] Sheiner said, tax collections turned back up again, all in the span of a few months.” (“Virus Did Not Bring Financial Rout That Many States Feared,” The New York Times, 3/01/2021)


States Are Even Struggling To Decide How To Spend Their Stimulus Windfall, ‘Which In Some States Goes Above And Beyond Any Shortfalls They Had Faced’

“The American Rescue Plan, approved in March by Congress and President Joe Biden, is pouring an unprecedented $195 billion directly into states’ coffers, a windfall to help them recover after COVID-19 shuttered businesses and stalled most of their state economies for months. But now they have an enviable problem: Deciding how to spend billions of dollars in newfound revenue, which in some states goes above and beyond any shortfalls they had faced.” (“States Have Billions Of Dollars From The American Rescue Plan. Now They Have To Spend It,” USA Today, 5/05/2021)

  • “The politically charged debate that led Republicans in Congress to blast Biden’s plan as a ‘blue state bailout’ is now happening in state halls of power, where governors and lawmakers of both parties are drafting or approving budgets banking on huge inflows of cash. … The money going directly to state governments is part of $350 billion the stimulus package is sending to states and municipalities — which is also making cities, counties and towns flush with cash.” (“States Have Billions Of Dollars From The American Rescue Plan. Now They Have To Spend It,” USA Today, 5/05/2021)


Senate Democrats Twice Voted Down Republican Amendments To The Stimulus Bill That Would Have Changed The Formula Allocating Funds To State And Local Governments So That States With Big Surpluses Like California Wouldn’t Be Showered With Cash From Taxpayers In The Rest Of The Country

SEN. LINDSEY GRAHAM (R-SC): “That CARES [Act] formula, that bill we passed, had an allocation for state and local funding that has been changed by our Democratic friends, and the biggest winners are New York and California. So the formula they are using now, New York and California win big…. You need to check and explain to people back in your state why they need more money than you do…. I am asking to go back to the bipartisan formula, reject this partisan formula that rewards Democratic blue States at the expense of most everybody else in this building.” (Sen. Graham, Congressional Record, S.1238, 3/05/2021)

SEN. MITT ROMNEY (R-UT): “California has record surpluses, billions of dollars in surplus. Yet, under this legislation, California itself at the state level gets $26 billion more and in total with its localities gets $41 billion. This is on top of their already surplus year. Think about that. We are going to be asking the American people to allow us to borrow money from China and others, pass that on to our kids and grandkids so that we can send money to states like California and mine and others that don’t need the money. This doesn’t make any sense at all. So my amendment does a very simple thing. It says: Look, you can spend all the money that the President’s plan suggests and the way they suggest it, but each state’s amount is limited by the amount of their revenue loss--meaning the gap they had from 2019 to 2020 and then 2021--as well as any COVID expenses, as well as any Medicaid expenses that grew. So just limit it by how much they need it. That is all it does.” (Sen. Romney, Congressional Record, S.1249, 3/05/2021)

But Senate Democrats voted down both the amendments offered by Sen. Graham and by Sen. Romney. (S.Amdt.1369 to S.Amdt.891 to H.R.1319, Roll Call Vote #82: Rejected 48-51: D 0-48; R 48-1; I 0-2, 3/06/2021; S.Amdt.1364 to S.Amdt.891 to H.R.1319, Roll Call Vote #96: Rejected 49-50: D 0-48; R 49-0; I 0-2, 3/06/2021)



Related Issues: Senate Democrats