Two Republicans disagree over how to fix their state and local funding concerns

Republican Sen. John Kennedy of Louisiana tried to pass a bill by unanimous consent Thursday aimed at expanding the flexibility of state and local governments to use the $150 billion appropriated to them in the stimulus bill, while also ensuring they didn't use the funds to "bailout mismanaged retirement systems," as many Republicans charge some Democratic governors want to do.

Posted 9:28 p.m. May 7, 2020 — Updated 9:28 p.m. May 7, 2020

Ted Barrett

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Lauren Fox, CNN

CNN — Republican Sen. John Kennedy of Louisiana tried to pass a bill by unanimous consent Thursday aimed at expanding the flexibility of state and local governments to use the $150 billion appropriated to them in the stimulus bill, while also ensuring they didn't use the funds to "bailout mismanaged retirement systems," as many Republicans charge some Democratic governors want to do.

Another Republican senator, Rick Scott of Florida, a former governor of the state, blocked it.

The moment aired the GOP's stark divide on an issue that has consumed their time in Washington this week. The question of giving states more flexibility has become a flash point for the Republican conference as they are wrestling with whether and how to approve more money for states. While many members have urged the Treasury Department to loosen restrictions on how the money is used and others have argued Congress should step in to relax the rules, others have a different view on how much the federal government should be stepping in to help line state coffers as the entire country faces the public health and economic crisis brought on by coronavirus.

Members like Scott have argued that the federal government should not step in to help states that have long struggled to maintain balanced budgets either under the weight of pension obligations or other spending on programs Republicans oppose.

Scott said that while he too is worried about state and local governments being able to use the $150 billion in coronavirus funds approved for them as a slush fund, he also said he was worried that the requirement in Kennedy's bill that the funds only be used for "operating expenses" was too broad and could lead states and local governments to use it in ways Republicans oppose.

"It's very difficult how you decide what is going to be used for one expense in a state budget or another expense in a state budget" Scott said. "I am very supportive of continuing to get needed resources to communities and first responders in need. That's why when the Senate passed the CARES Act, we wisely placed limitations on how this money could be spent. We need to maintain those guardrails to ensure that that country can continue on the path to recovery."

Governors across the country have been urging members to loosen restrictions, arguing that without the federal government's help, states could be forced to go bankrupt at a time when they have twin economic and health crises.

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