Why Washington has failed New York

New York doesn’t lack for representation in Washington, D.C., although sometimes it may feel that way to New Yorkers. Gov. Andrew Cuomo has complained about how the federal government shortchanged New York in the $2 trillion COVID-19 relief bill that passed Congress late last month. While the bulk of the law is devoted to offering loans and subsidies to businesses, and aid to individuals through stimulus checks and expanded unemployment benefits, the state got shafted in two crucial realms: direct aid to states and to hospitals. 

The result, thus far, is continued spread of the new coronavirus and hundreds of deaths per day. And it remains an open question whether, or how much, New York’s representatives in Congress will be able to secure necessary funding going forward. 

But an examination of the details of how the bill was written, how it has been implemented and how the next round of COVID-19 relief is being negotiated makes one thing clear: The politician from New York who deserves the lion’s share of the blame isn’t any member of the state’s congressional delegation, it’s President Donald Trump. 

To be sure, Congress came up short for New York too. At the time the recent bill passed, the Empire Center's Bill Hammond wrote, “Although New York is taking the brunt of the coronavirus pandemic – with 43 percent of the nation’s known cases and 40 percent of the deaths – the state is due to receive only 5 percent of a $150 billion ‘relief fund’ established in Washington.” That’s because the funds were allocated by assigning a certain minimum amount to each state and then the rest based on population. A state’s COVID-19 caseload wasn’t considered at all. 

The aid to states was meant to help shore up state budgets that have been impacted in two ways by COVID-19: direct state spending on combatting the pandemic, which Cuomo has said will cost New York several billion dollars, and declining tax revenues because of the recession that the virus and its attendant business shutdowns have triggered. State Budget Director Robert Mujica estimates New York’s revenue shortfall will be between $10 billion and $15 billion. Since the economic downturn is nationwide, it makes sense that funds to ameliorate state budget deficits would be apportioned by population, but the funds for pandemic response logically would have been based on caseload. 

Last Friday brought more bad news for New York: Kaiser Health News reported that $30 billion for direct grants to hospitals in the new law would be distributed by the federal Department of Health and Human Services “according to their historical share of revenue from the Medicare program for seniors – not according to their coronavirus burden.” States with few COVID-19 cases per capita, including Minnesota, Nebraska and Montana, get more than $300,000 per reported case, while New York would receive only $12,000 per case.

This comes at a time when New York City-area hospitals and other health care facilities are overwhelmed with COVID-19 cases and remain under-resourced. On Tuesday, Politico reported that “hospitals across New York City are still scrambling for life-saving equipment and protective gear,” while nurses “continue to bemoan a shortage of protective gear like gowns, masks and other face shields.” On Saturday, The New York Times reported, “In New York, nursing home administrators … were unable, they said, to have residents tested to isolate the virus or to get protective equipment to keep workers from getting sick or transmitting the virus to residents.” New York City has even started to round up ponchos as a substitute for hospital gowns. 

New York continues to lack the capacity to test everyone with possible COVID-19 symptoms. Late last week, New York City announced it faced a shortage of nasal swabs needed for testing so severe that it could run out within days. On Monday, New York Mayor Bill de Blasio announced that the federal failure to provide testing resources had forced the city to start producing its own tests. 

Why, months into this crisis, don’t nurses have enough protective equipment? How is it possible that the federal government has devoted an unprecedented $2 trillion to addressing the new coronavirus, and yet these conditions persist? 

Despite the malapportionment of the U.S. Senate, New York – the United States’ fourth-most populous state – has significant power in Congress. New York’s senior senator is Senate Minority Leader Charles Schumer. There are 27 members of the House of Representatives from New York, including Rep. Hakeem Jeffries, the fifth-ranking member of the lower chamber’s Democratic majority, and Rep. Nita Lowey, chair of the powerful House Appropriations Committee. Other prominent New York representatives include the well-known and outspoken Sen. Kirsten Gillibrand, the committee chairs Reps. Eliot Engel, Carolyn Maloney and Jerrold Nadler, and left-wing millennial icon Rep. Alexandria Ocasio-Cortez. 

So, have all of these representatives failed their state?

Arguably, especially on the state aid funding formula, they have failed to adequately protect their constituents’ interests. Both Congress and the White House also clearly suffer from distorted priorities, chiefly a commitment to putting the economic recovery before defeating the disease that has caused the downturn. As Politico’s Michael Grunwald has noted, former Obama White House economic advisor Austan Goolsbee likens this approach to “keeping warm by burning money instead of fixing the furnace.”

But the larger answer to why New York has been left to suffer is that the Trump administration deliberately allows it to, even in defiance of the law the president recently signed. 

The distribution of personal protective equipment is not being centrally controlled by the federal government, as it normally is in a disaster. Instead, the Trump administration has decided to leave the process up to private medical supply distribution companies that often are price-gouging as states compete for scarce resources. Even supplies that are procured by the federal government are turned over to distribution companies. Those companies then mark them up to take a profit and sell the gloves, masks and so on through their normal distribution channels. The result? A hospital in a region with hardly any cases gets a steady supply, while there is nowhere near enough of a surge in areas such as New York City and its suburbs, where severe outbreaks of COVID-19 mean hospitals and nursing homes are going through them at a much faster rate. 

Supply chain experts say Trump should have used the Defense Production Act to ensure sufficient production and rational distribution of protective gear, ventilators and tests. But this is an executive branch power, which Congress can do little to control. Schumer sent Trump a letter on April 2 calling on the president to take control of the supply chain and direct resources where they are most needed, but Trump remains recalcitrant. 

One senior Democratic congressional staffer from New York, who asked for anonymity to speak frankly, notes that any effort to force Trump to use the DPA would raise constitutional questions about the separation of powers. “You'd get bogged down in a debate over whether Congress even has the legal authority to force the president to issue a specific order under the DPA,” the staffer said. 

It’s a similar story with HHS distributing hospital aid without regard to where the COVID-19 cases actually are. That’s an administrative decision, which U.S. Sens. Cory Booker and Bob Menendez and Rep. Bill Pascrell of New Jersey complained “failed to consider congressional intent.”

But what is the recourse? A lawsuit, which would take months to resolve? Congressional hearings, which the Trump administration will stonewall? 

One power Democrats in Congress do have is appropriations, and one point of leverage that they have over Trump is the ability to reject further aid to business to bolster the economy. Privately, congressional Democrats say they intend to get New York its fair share of money in subsequent COVID-19 spending bills. “There’s no bookend on this yet,” said one source close to Senate negotiations, who requested anonymity to discuss ongoing negotiations. 

The $150 billion in aid to states wasn’t included in the original Senate Republican coronavirus bill. Schumer and his House colleagues got that added, including almost $4 billion for the struggling Metropolitan Transportation Authority. Last week, Senate Democrats proposed an additional COVID-19 bill that would have provided more aid to hospitals and states, including $16 billion for New York state. Republicans, who want instead to only fund $250 billion in additional loans to small businesses, shot it down. 

Some commentators argued for Congress to include requirements that Trump distribute medical aid where it’s needed in the last coronavirus bill, or in the next one. But congressional insiders scoff at the notion that Trump’s subservient Senate Republican majority would pass a bill forcing him to do anything he opposes. 

Besides that, there’s the question of whether writing a bill micromanaging the White House response and seeing it implemented would happen fast enough, when just getting Trump to take action would be faster. While Schumer’s entreaties to Trump have been largely unheeded, the administration has sporadically come through for New York. For instance, it responded to an emergency request for hand sanitizer and face masks for the NYPD within a day. “The administrative push works much faster than legislative efforts,” said the source close to the Senate negotiations. “You can’t just think with a legislator’s mind, you have to use a big toolkit.”

On Wednesday, Schumer and U.S. Sen. Patty Murray of Washington introduced a $30 billion proposal to produce and distribute more tests for COVID-19. One might wonder why Senate Majority Leader Mitch McConnell, who has gladly spent roughly 40 times as much on aid to businesses in the last bill, wouldn’t eagerly embrace the idea. But McConnell has resisted such rational measures before, and it is he, besides Trump, who must sign on for it to pass. “Chuck Schumer is not Mitch McConnell,” said the source, ruefully. “Maybe someday.”