Is John Bel Edwards Really Going To Veto A CARES Act Business Relief Fund?

You wouldn’t think it was within the Overton Window for Louisiana’s governor to do that, but he actually said yesterday he’s against creating a fund to help bail out struggling businesses the economic shutdown he ordered have put in extremis.

At issue is a proposal by Sen. Heather Cloud, a freshman Republican from Turkey Creek, which would block off a portion of the $1.8 billion in CARES Act money that the federal government gave to Louisiana to cover costs imposed by the COVID-19 pandemic…

The Senate gave Cloud’s resolution, SCR 65, a unanimous 36-0 vote back on May 20 and sent it to the House. In the House Appropriations Committee a week ago it blew through with ease.

So much so that they’ve now added an extra $100 million to the initial $200 million proposal. It was inserted into a bill by Sen. Bodi White that would address the controversy surrounding the state’s unclaimed property fund, and then the House passed it on a 72-26 vote yesterday.

But Edwards has now weighed in, and true to form if it’s something that involved the private sector he ain’t for it

Using federal pandemic relief money to set up a $200 million fund to help small businesses might be a good idea, but now is not the time to consider it, Gov. John Bel Edwards said Wednesday.

Louisiana state government received $1.8 billion through the federal CARES Act and plans to share up to 45 percent of that money with local governments.

Sen. Heather Cloud, a Turkey Creek Republican, has proposed using some of the local portion to set up a $200 million fund to boost small businesses that shut down or limited their operations as part of the effort to contain the pandemic.

“Some businesses had to close entirely, while others have operated at reduced capacity,” Dawn Starns, who heads the Louisiana chapter of the National Federation of Independent Business, said in support of the idea. “Either way, it may take months before revenue returns to normal.”

State officials don’t think local leaders have had enough direct COVID-19 expenses to use all of the money, but they won’t know for sure until the applications come in. Edwards said Congress might retroactively change the CARES act rules and allow local governments to use their money to plug budget holes, which would expand how much of the money local officials can spend.

Edwards said Congress might also approve more money for businesses. He said a special session in the fall, when lawmakers know what the federal government has and hasn’t done and how the economy is recovering, would be a better time to consider the idea of a dedicated fund. Using the money to shore up the state’s unemployment insurance fund might also be worth considering, he said, noting that business owners pay more taxes when the fund falls below $750 million.

In other words, the state gobbles up pretty much that whole $1.8 billion, and whatever it doesn’t spend it throws to local government. And the peons who own hair salons, restaurants, small retail and other businesses? Well, they can just sit and spin, and maybe the federal government will come to their aid.

Don’t forget that while the feds aren’t exactly covered in glory with respect to this shutdown it was John Bel Edwards who ordered all those doors closed in Louisiana, not Donald Trump. And it was absolutely John Bel Edwards who extended that shutdown from May 1 to May 15, which had the effect of killing a not-insignificant number of businesses permanently when they simply couldn’t hold out any longer.

In other words, this is not some corporate-welfare package we’re talking about. This is recompense for damage directly and deliberately done by government to the people who would be getting this money. We can argue the rest of the day about whether that damage was done for good reason; that’s not the point. These businesses have suffered huge economic losses through no fault of their own, and those CARES Act funds were given to the state of Louisiana with the specific purpose of helping businesses stay alive included in the permitted uses of those funds.


And John Bel Edwards says it’s a bad idea to appropriate that money for small business now. Small business can wait for the next tranche of federal money, he says.

It would be unbelievable, but it’s predictable.

And stupid.

Cloud, who is a businesswoman as well as a politician – she and her husband have a trucking company – has forgotten more economics than John Bel Edwards will ever learn. This wasn’t a difficult explanation

Sen. Heather Cloud, a Turkey Creek Republican, said her proposal would help business owners who did what they were asked to do by the government to protect public health. By helping those businesses stay open, lawmakers could boost the local tax base for years to come, she said.

“My plan doesn’t take away from the locals,” she said. “It indirectly gives money to the locals.”

White’s bill heads back to the Senate, with a vote likely on Saturday. It passed with a 36-0 vote in its first time through; with Cloud’s proposal attached to it it’s surely going to have a lopsided margin again.

Unless something strange happens, Edwards’ opposition won’t amount to anything. He isn’t actually going to veto something that passes with far more than a veto-proof vote. But the fact he would publicly oppose Cloud’s proposal to give business relief out of that $1.8 billion, which is well more than the state needs at the moment – Louisiana’s real fiscal cliff issues come in the 2022 fiscal year, when the federal swag runs out and the state’s economy remains in the toilet thanks to its lack of economic competitiveness – says volumes.



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