Gov. Noem Has Trump's Ear on COVID Aid and Fireworks

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The call came from the White House, and the voice on the other end of the line was wondering about the Fourth of July. “He did comment on fireworks first,” Kristi Noem said of her recent conversation with President Trump.

And this is fine with the Republican governor of South Dakota, who wants her state to open up from the pandemic slowdown as quickly and safely as possible. “We are going to have fireworks, no matter what,” she told RealClearPolitics. And this year, as Trump has long wanted, they will again be lit from atop Mount Rushmore, resuming an annual display that was paused in 2009 due to fire danger.

The president hinted earlier in the year that he might even attend, but that was before a global health pandemic exploded. The coronavirus has swept through the country, infecting more than a million and killing over 60,000. It has also left a massive crater in state budgets. Although exact numbers won’t be available in South Dakota until later this month, Noem fully expects a dramatic drop. Her state has no income tax or corporate tax and relies almost completely on sales tax, a revenue stream substantially dammed by a population in voluntary self-isolation.

Hence, the call with Trump.

Congress approved and the president signed a $2 trillion coronavirus response bill in March, sending $1.25 billion specifically to South Dakota. But those dollars are tied to the pandemic. “Probably our biggest challenge,” Noem explained, “is that right now, those dollars need to be tied to COVID-19 response, and it doesn't give us any accounting for what happened to our economy.”

Before her phone call with the president, the governor complained that those requirements “tie our hands.” She said the same to the president and Treasury Secretary Steve Mnuchin on Thursday. They indicated that more relief may be on the way. “I told them that I was not asking for more money,” Noem said. “I just want flexibility.”

According to the governor, Trump and Mnuchin indicated to her “that there was a potential to add some language to a Phase Four bill that would build flexibility into the CARES Act.” Reprogrammed money, she stressed, wouldn’t be used to “bail out pensions” or cover for “bad management in previous years.”

South Dakota was already tightening its belt before the pandemic hit. The state Constitution requires that the governor and legislature balance their budget each year, which has led to a AAA credit rating. The coronavirus now threatens the fiscal health of the state, and Noem warns that the cure from Congress could make matters worse.

“In order for me to access and utilize that money, I would have to potentially create more programs and more bureaucracy to utilize it in different ways,” Noem explained. She told Trump and Mnuchin that “just in my viewpoint this is not the right way to be handling the situation — that we would, in a time of crisis, grow government and grow government programs.”

Those restrictions have foisted an ugly accounting exercise on South Dakota, one Noem doesn’t want to finish. A large share of state funds was earmarked already for nursing homes and community health before the pandemic. If the White House and Congress don’t hammer out a new deal, she warned, “that is what I'm looking at cutting while they would force me to create other programs.”

South Dakota is hardly the only state facing financial hardship. Other states are struggling to meet the health emergency while covering normal expenses, and the National Governors Association released a statement earlier this month begging the federal government for at least $500 billion. Mitch McConnell scoffed.

The Senate majority leader suggested that some states consider bankruptcy rather than “borrow money from future generations.” Backlash was swift.  Andrew Cuomo erupted, in particular, saying it was “one of the really dumb ideas of all time.”

“States should declare bankruptcy? That's how you're going to bring this national economy back?" the New York governor said at a press conference. “You want to see that market fall through the cellar? Let New York state declare bankruptcy. Let Michigan declare bankruptcy. Let Illinois declare bankruptcy. Let California declare bankruptcy. You will see a collapse of this national economy.”

That back-and-forth puts Noem in a unique position: She may be the only state executive who isn’t asking for more money. She has already attracted plenty of controversy in her short tenure.  When the rest of the country went into lockdown, South Dakota bucked the trend. “Kristi Noem has insisted that she still will not issue a stay-at-home order in her state,” Rachel Maddow noted on MSNBC. Her guest, Sen. Elizabeth Warren, chided, “The governor just lets this problem get bigger and bigger and bigger.”

But South Dakota ranks towards the bottom of the list in number of cases of the virus, 2,526, and deaths, 21. At one point, a meatpacking plant in Sioux Falls became the biggest coronavirus hotspot in the country. Noem still wouldn’t issue a stay-at-home order. She ordered nonessential businesses to allow employees to work from home, limited social gatherings, and urged citizens to take caution.

The limited response has spared South Dakota from the angry protests like those in Michigan. It is also on brand for the conservative who warns that expanding governments “are how we lose our country.”

“It's times of crisis when things get broken to where they're not able to be repaired in the future,” Noem continued, “and that is what concerns me about this pandemic.”

Her limited response to the pandemic has launched her star in conservative circles far beyond South Dakota. Local business threw her an impromptu parade, circling around the state capitol at a safe social distance in their vehicles, to show their appreciation. Meghan McCain of ABC’s “The View” praised the governor as “the real one to watch for the GOP’s future.”

Noem remains focused on the day-to-day response to the virus. Even Independence Day still seems a long way off, though Trump announced on Friday that he would travel to Mount Rushmore and that “they are going have the big fireworks.”

Noem told RCP that she will be there to greet the president, and even if social distancing considerations are still enforced, “we can make sure the whole world gets to see it again.” Republicans and Democrats, meanwhile, continue to feud over state funding.



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