Red states are getting a big bailout from the COVID relief bill thanks to Democrats

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Despite Republican claims to the contrary, a Reuters analysis found that red states disproportionately benefit from the American Rescue Plan.

As President Joe Biden signed Democrats' $1.9 trillion COVID-19 relief bill into law Thursday afternoon, Republicans falsely claim the bill only serves to bail out "blue states" at the expense of "red states" — but the bill is poised to deliver notable funding and relief to many deep-red states in need during the pandemic.

The American Rescue Plan will send more than $195 billion in aid to all 50 states and Washington, D.C., as well as $130.2 billion in aid to local governments throughout the country, benefiting red and blue states alike. In fact, according to a recent Reuters analysis, traditionally Republican states will receive a disproportionate amount of federal aid from the package as compared to traditionally Democratic states — $3,192 per state resident as opposed to $3,160. And the bill levies no extra taxes on red states.

But on Thursday afternoon, Rep. Jody Hice (R-GA) took to social media to criticize the legislation, tweeting, "It's red states like Georgia who will have to bail out the deep blue states who recklessly spent taxpayer $ on irresponsible decisions over the past year. They need to face the consequences of their actions rather than lean on the red states & the stimulus to bail them out!"

This has been a frequent talking point of Republicans, with Iowa Republican Sen. Joni Ernst claiming last week that Iowans shouldn't have to "foot the bill for other states' bad behavior and mismanagement," and House Minority Leader Kevin McCarthy complaining in mid-February about Democrats seeking "blue-state slush funds." Sen. Rick Scott (R-FL) has opposed state and local funding to his own state, hard hit by the pandemic, despite criticism from Florida mayors.

"Biden wants to spend more than $350 billion to bailout wasteful states," Scott said in January. "I've been clear — asking taxpayers to bailout failed politicians in liberal states like New York and Illinois and save them from their own bad decisions isn't fair to fiscally responsible states like Florida."

The accusation of "blue state bailouts" may have originated with Donald Trump early in the pandemic, as he frequently made false claims that blue states merely wanted a government handout at the expense of other states.

Trump tweeted in April, "Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking?"

Senate Minority Leader Mitch McConnell, too, sought to block funds to state and local governments in the first COVID-19 relief bill passed last spring, the HEROES Act, claiming the legislation was a "blue state bailout" despite the $7 billion it directed toward his home state of Kentucky. He later touted himself as having providing relief to the citizens of Kentucky — despite his own efforts to fight the legislation.

But despite Republican claims, a third-quarter report from the Urban-Brookings Tax Policy Center found that many red states were harmed by the pandemic. Six states saw the steepest drops in tax revenue (Alaska, North Dakota, Nevada, Florida, Oregon, and Texas), and of these, two-thirds — Alaska, North Dakota, Florida, and Texas — are traditionally Republican strongholds.

These four states in particular suffered economically during the pandemic due to their dependence on tourism and natural resources, both of which saw depletions during lockdown with the collapse of tourism and oil prices.

The report also found that the 22 states that saw economic improvement during the third quarter of the pandemic were a fairly even mix of red and blue states.

Meanwhile, although not a single congressional Republican voted for the historic $1.9 trillion COVID-19 relief bill, Biden is planning a trip to visit states all over the country, red and blue alike, to celebrate its passage and the substantial aid it provides to every state.

Published with permission of The American Independent Foundation.