In opposition to the Biden federal stimulus package, Republican leaders in the House and Senate labeled it a “payoff to progressives” and a “blue state bailout.” A lot of their hostility was directed at proposals for a $15 an hour federal minimum wage. Senator John Thune, Republican from South Dakota, said he did just fine earning $6.00 an hour in the 1970s. Senator Thune was born in 1961 so he was 18 in 1979. Assuming that is when he started working, his $6.00 an hour was worth $21.62 in today’s money, far more than the $15 an hour minimum wage he now opposes.
Using similar language, Donald Trump fought increased federal funding to help states recover from the Coronavirus pandemic “because all the states that need help — they’re run by Democrats in every case.” Mitch McConnell’s Senate office issued a release with the heading “Stopping Blue State Bailouts.” In an interview, McConnell suggested that Democratic cities and states should declare bankruptcy so they could renege on pension obligations to workers.
While President Biden states he wants to be President for all Americans, it is long past time to end the federal “Red State” subsidies that help keep hypocritical Republican office holders in power. According to a 2019 study by the SUNY Rockefeller Institute of Government, three of the four states that get the biggest federal handouts are Republican: Mississippi, West Virginia, and McConnell’s home state, Kentucky. These states receive twice as much in federal funding as they pay in federal taxes. The states that pay the most into federal coffers, far more they receive back, are “blue states,” Connecticut, Massachusetts, New Jersey and New York. The study did not include the higher federal taxes paid by people living in wealthier states when many itemized deductions were reduced or eliminated in the Trump “tax cut” or billions of dollars in federal funds directed to the western plains states impacted by Trump’s ill-fated tariff war with China. Direct farm aid, most going to wealthy agri-businesses, rose each year of Trump’s presidency. It was $11.5 billion in 2017 and was over $32 billion in 2020.
The Rockefeller Institute study found that in 2017, New York State paid $35.6 billion more to the federal government than it received in support, New Jersey paid $21.3 billion more, and Massachusetts $16.1 billion more. New York’s per capita balance of payments deficit was $1,792 for each person living in the state. On the “Red” side of the spectrum, Florida received $45.8 billion dollars more from the federal government than it contributed, Kentucky $40.7 billion, Alabama $32.6, and Ohio $32 billion. West Virginia received a $7,764 subsidy for each resident, Oklahoma $4,000, and former Vice President Mike Pence’s home state of Indiana $2,343.
It is a mistake to cut federal aid to people in need, but the Biden administration needs to reconsider how federal dollars are spent. The current system is essentially bribe money to white voters in Red States that keeps Republicans in power.
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