URGENT: Senate Leader McConnell joined Hewitt on states filing bankruptcy

This morning on News Talk 104.1, Hugh Hewitt was joined by Senate Majority Leader Mitch McConnell to discuss “What Comes Next”.

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The transcript is available below along with the full audio of the interview is also available.

Senate Majority Leader McConnell joined me this morning:

Audio: 04-22hhs-mcconnell

Transcript:

HH: Joined by the master of the Senate, Senate Majority Leader Mitch McConnell. Welcome back, Leader. It’s great to have you. Congratulations on another win provided that the House actually passes it tomorrow.

MM: Well, thanks, Hugh. I think the House will. Apparently, they have to call back a bunch of people to do it. But look, that’s what we ought to be doing, and in fact, next time we act on one of these bills, I’ve said the full Senate needs to be here and we need to be back in session.

HH: Now Speaker Pelosi took the podium yesterday and said an astonishing thing which I want to play to you to get your reaction, cut number 19, Speaker Pelosi yesterday:

NP: We have to, we have to insist on the truth…that is why we’re going to open up our great economy. Everybody’s restless. Cabin fever has set in, in many ways.

HH: Now Mr. Leader, I want to insist on the truth. You proposed this two weeks ago, the Paycheck Protection Plan replenishment. She has blocked it for two weeks. Is that not the truth?

MM: Yeah, that’s a fact, an indisputable fact. And a 12 day delay when we ran out of money for this popular small business program. The demand was enormous. They wanted to extract other things. Fortunately, what they wanted to extract the most, I refused to go along with, and the White House backed me up, and that was we’re not ready to just send a blank check down to states and local governments to spend anyway they choose to. We had a tranche for them in the first bill, the $2.2 trillion dollar bill. It has to be Coronavirus-related. And I think we need to have a full debate not only about if we do state and local, how will they spend it. But also, we haven’t had much discussion about adding $2.7 trillion dollars to the national debt, and the way that could indeed also threaten the future of the country. Look, the only solution is ultimately to begin to open up. I was encouraged the White House Taskforce set up Phase 1. Many governors are now looking at beginning to carefully reopen. And I think that’s the only way we can ultimately solve this problem, is to begin the process of getting back to normal.

HH: Now Leader, I haven’t been on the radio as long as you’ve been in the Senate, but it’s close. And since I’ve been on the radio, I’ve been warning people that pension funds for public employees are dangerously underfunded. And I know that the Speaker and your colleague, Chuck Schumer, want to pour money into these funds. But they need to be reformed. I mean, some of the benefits they grant are ridiculous. I don’t think any public employee, even a great teacher of 30 years, should make more than a colonel in the Army or the Marine Corps who served 25 years, or a captain in the Navy. I just think they’re out of control. Will you insist on reforms of state pension plans if they get replenished by the next bill?

MM: You know, we’ll certainly insist that anything we’d borrow to send down to the states is not spent on solving problems that they created for themselves over the years with their pension programs.

HH: Let me ask as well about the problems of liability, Mr. Leader. I’ve talked to businesses all morning long, and all week long, and they’re afraid that when they reopen, the Plaintiff’s Bar is going to descend on them and blame them for COVID. Now I’m an old lawyer, and you’re an old lawyer. We know that foreseeability is part of tort law, and there is no foreseeability here. But do you think there ought to be federal preemption on this issue so that all cases are in one location, maybe D.C. or the 2nd Circuit, and they’re governed by one standard?

MM: Yeah, I think that would be a good idea. Now the difficulty of achieving that with a Democratic House, you can understand. They are a wholly-owned subsidiary of the Plaintiff’s Bar, and rarely do anything that discourages litigation. Generally speaking, they’re trying to create more litigation. So I don’t want to get your hopes up that this very necessary step could actually be achieved with a Nancy Pelosi-led House.

HH: I think you might be able to trade off if you allow them to sue the state-owned enterprises of China and the WHO and the CCP of the PRC. You might be able to switch out liability for the people who actually caused this and keep American businesses safe of the swarm, because you and I both know what’s going to happen as soon as businesses reopen. The plaintiffs lawyers are going to serve papers the next day.

MM: Yeah, I’m afraid that’s what we’re anticipating. And if I thought there was a way to stop that practically with a Pelosi-led House, believe me, I’d be clamoring for it.

HH: Well, maybe her constituents will, there are enough small businesses led by liberals, they might agree on this one. Mr. Leader, it wouldn’t be a conversation if we didn’t talk about judges. I know you folks are overwhelmed. You’ve done an amazing job. But our friend, Senator Graham, we’ve got to get him holding some hearings for Rick Richmond and nominees like John Flynn who aren’t even up there, and votes for Mark Scarsi. California is out of judges. When are we going to get back to hearings and votes?

MM: Well, the current plan is to go back in session on May the 4th. I haven’t seen anything that would discourage me from doing that. And as soon as we get back in session, we’ll start confirming judges again. We need to have hearings, and we need to confirm judges. Hugh, you and I have discussed this before. My motto for the year is leave no vacancy behind. That hasn’t changed. The pandemic will not prevent us from achieving that goal.

HH: That is music to my ears. Now let me talk to you about FISA reauthorization. Attorney General Barr was on the show yesterday. Most of the attention was paid to his comments about states and their running the risk of violating civil liberties. We can come back to that. But he also warned that the Communist Chinese Party has upped their espionage against the United States. I don’t know what’s happened to FISA. I just know that we need tools that are appropriately employed. Where is that debate right now, Mr. Leader?

MM: Well, the Attorney General is taking a look at it, and is going to be making a recommendation. And if reforms need to be made, we’ll do it. What the Democrats, however, want to do is to basically dismantle it entirely. I think it has been an important tool to help keep us safe. We can reform it, but I don’t want to eliminate it.

HH: Now are you concerned that the Chinese Communist Party is going to act aggressively as the world comes to understand that they are behind this virus’ spread?

MM: Yeah, it’s a big problem. For those who had doubts about the way China operates, I think those doubts have been overcome by the experience of their lack of transparency, actually, their lack of telling the truth that exacerbated this pandemic. And that’s what happens when you run a society that discourages openness and free discussion. And it’s a very different approach to life and to governing than we have in the West.

HH: The President tweeted out a few moments ago that I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea. There’s obviously a predicate there, Mr. Leader. Have you heard about what it is?

MM: No, I haven’t, but you know, the Iranians act out periodically, and I think the President’s had a very restrained approach. But if you start, shall I say, getting in our space, or in the case of Soleimani, if you’re responsible for killing Americans, then you could expect a significant response, a measured, measured but significant response.

HH: Now Leader, I want to go back to legislating in the environment in which we are in. I know when you put the CARES Act together, you used taskforce, you used some of your best people like Marco Rubio. I have great respect for Lamar Alexander. A lot of the state governments are going to be smashed up by this. But there is no Chapter 8 in the bankruptcy code. Who are you going to, you know, for states, no states can go bankrupt. Local governments can go bankrupt and reorganize. Who are you going to task to lead the effort on deciding what to do or not to do for the states?

MM: Yeah, well, I think it’s going to be a broad discussion without, you know, throughout the conference. I mean, we all represent states. We all have governors regardless of party who would love to have free money. And that’s why I said yesterday we’re going to push the pause button here, because I think this whole business of additional assistance for state and local governments need to be thoroughly evaluated. You raised yourself the important issue of what states have done, many of them have done to themselves with their pension programs. There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations. So this is a much bigger conversation than we’ve had providing assistance for small business because the government shut them out, put them down, put them out of business, or assistance to hospitals which were overwhelmed by the COVID-19 disease. This is a very different decision. These are all taxing authorities, just like we are, and I think that’s why we need to have a fulsome conference-wide discussion among Senate Republicans before we go down this path.

HH: I agree. I think people do not understand how badly mismanaged some states have been, and their unfunded liabilities. And if they were in the private sector, they would have to reorganize under the bankruptcy code. But there is no bankruptcy code chapter. Do you think that we need to invent one for states so that they can discharge some of these liabilities that were put in place by previous governors like, I mean, Jerry Brown ran a giveaway program for public employee unions that was just astonishing, and as did Gray Davis, as did, you know, a lot of Democratic governors, Illinois is probably the worst, and Connecticut. They’ve just given money away for years to people who aren’t working.

MM: Yeah, I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities. And there’s no good reason for it not to be available. My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of.

HH: Now I want to close, Senator McConnell, by talking about judges again. I raised a hypothetical with Attorney General Barr yesterday which he was not comfortable with, but I need an answer to, and I think a lot of federal judges who could retire need an answer to it. They would retire if they knew they could revoke their retirement if their replacement wasn’t confirmed. Do you believe it’s Constitutional for a federal judge at any level to turn in a resignation letter saying I will retire provided a successor is confirmed by December 31st, and if not, I am not retiring? Do you think that’s Constitutional?

MM: Good, I could be wrong, but I think that’s been done before, that retirements have been announced contingent upon replacement. I’m not certain about that, but that’s a good way to, that’s something worth taking a look at.

HH: I believe that they’ve often said I’m retiring upon confirmation of successor. I just want them to be no careful that they are not turning their judgeship over to a Democratic president and a Chuck Schumer-led Senate, though I don’t think that’s going to happen. I think it’s perfectly Constitutional. Let me close with that. How do you feel about the politics of this? You have not been acting politically. You’ve been acting for small businesses. But how is it playing out politically?

MM: You know, I think it will dominate the campaign. The Democrats, of course, will be on the attack against the President saying he should have done this, or he should have done that. I do think the Coronavirus has completely redefined the landscape for the fall election. We’re all working hard. We’ve finagled, for the most part, to govern on a bipartisan basis so far. I would look for that to break down as the campaigns heat up and the finger pointing begins.

HH: Do you, last question, Leader McConnell, do you ever expect Speaker Pelosi will escape that ice cream video? It is sort of like the George…

MM: (laughing) Well, that’s a good question. I expect we’ll see it in a lot of ads.

HH: When you first saw it, what was your reaction?

MM: (laughing) Well, it was not exactly, it did not exactly look like someone who was suffering through the pandemic. Let’s put it that way.

HH: That’s gently put. Thank you, Leader McConnell. Press on. Small businesses everywhere thank you for holding the line and for getting the CARES Act replenished. It’s desperately needed.

MM: Thanks, Hugh.

End of interview.