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Gov. Phil Murphy. Photo by Kevin Sanders for the New Jersey Globe.

Governor has no hard stance on bailouts

Murphy says states will need massive aid from federal government

By Nikita Biryukov, March 18 2020 4:52 pm

Gov. Phil Murphy said he doesn’t have a hard stance on bailouts for large corporations under consideration at the federal level, though he said New Jersey and the country were going to need a large degree of financial aid.

“I don’t really have a comment per se on bailouts,” Murphy said.

U.S. Sen. Elizabeth Warren, whose political rise largely stemmed from her role on a congressional panel overseeing the bailouts issued during the great recession, has offered support for bailouts in response to the threat of an economic collapse over COVID-19, though her support comes with caveats.

“Let me be clear: We’re not doing no-strings-attached bailouts that enrich shareholders or pay CEO bonuses. Period,” Warren said on Twitter.

Warren’s conditions call for businesses to keep employees on payroll using federal funds, raise their minimum wage to $15 an hour by the end of the year, ban stock buybacks permanently and bar companies receiving federal funds from paying shareholder dividends for three years for three years after they receive government aid.

The plan also calls for worker representation on company boards, protections for collective bargaining agreements, shareholder approval for political spending and oversight and penalties for non-compliance with the plan’s other measures.

Murphy didn’t comment directly on Warrens proposals, saying he was not aware of the content of the eight-point plan.

“I actually don’t even know what Sen. Warren’s plan proposal is, but I will say this. I don’t know what form it takes other than it better take block grants,” he said.

Still, the governor, a former high-ranking executive at Goldman Sachs’ investment management division, said the state would not be able to buoy its economy without the aid of the federal government.

“The amount of stimulus we’re going to need as a country and as a state is a big number. And so my only advice is history will not be unkind to our country if we overshoot. History will be very unkind to our country and our state if we undershoot,” he said. “Whatever is at our disposal — there’s no amount of money in any state, New Jersey, New York, California, you name it — there’s no amount of money that can deal with the economic challenges that will come from this.”

Lawmakers on the hill are exploring a bailout for industries affected by the virus that could be worth $1 trillion.

They’re also considering a adopting a universal basic income to blunt the economic threat posed by the virus.

To Murphy, that’s heartening, but it may not be enough.

“There’s a lot of feeling, to me, that there’s a lot of bipartisan coming together,” Murphy said. “But the numbers are going to need to be very substantial.”

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