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The Truth About "Unrestricted Aid"

Rock Hill, SC, May 4, 2020

“Unrestricted aid” – remember this phrase, because it’s going to be a major point of contention in the coming weeks.

As Congress looks into a possible 5th piece of legislation in response to this pandemic, there’s now a growing push for the federal government to send over half a TRILLION dollars in unrestricted aid to states and local governments.

By “unrestricted” I mean no conditions on how that money can be used, and no requirement that it go towards their COVID-19 response. It’s essentially the federal government borrowing money – because we certainly don’t have an extra half-trillion sitting in a bank somewhere – to send to state, local, and tribal governments to use as they wish. Anyone see the problems with this??

How many times have we heard of states that are scrambling to cover grossly underfunded pension liabilities? What about states where public sector unions have driven up the cost of government to nearly unsustainable levels? Or states that have virtually nothing set aside in the way of rainy-day funds? (I’m not saying South Carolina has been perfect, but we’ve made significantly better decisions than most.)

Congress has already sent $150 billion in direct aid to state and local governments for their COVID-19 response. If more funds are needed for that specific purpose, then it’s something Congress can debate and consider. However, this notion that states should now receive additional funds with “no strings attached” is a horrible idea, because many states will simply use those funds to support & sustain decades of fiscal mismanagement.

It’s not lost on me that the KING of all fiscal mismanagement is the federal government. If you pay taxes, your individual share of our national debt is now over $200,000. It’s ideas like this that are the reason why.