Treasury secretary warns NYC would not receive federal bailout if Mamdani policies prevail

WASHINGTON — Treasury Secretary Scott Bessent warned on Wednesday that the federal government would not bail out New York City if Zohran Mamdani's policy proposals become law, telling Fox Business that New York would be left to fend for itself in a crisis. Bessent said there is little certainty in such scenarios and suggested that a bailout would be unlikely if Mamdani's plans are enacted. He invoked Gerald Ford's historic stance during New York's fiscal crisis, saying the response would be Drop dead. He did not specify which parts of Mamdani's agenda would trigger trouble, and Mamdani's campaign did not immediately respond to a request for comment.

Mamdani won the Democratic nomination in a June 24 primary with 56% of the vote and has emerged as a leading candidate in the November election, his campaign has said. His platform includes rent freezes, free city buses, city-owned grocery stores and free childcare, funded by raising corporate taxes and imposing an extra 2% tax on New Yorkers earning more than $1 million a year. Bessent described Mamdani as the socialist protégé of Elizabeth Warren, who has criticized any bailout for Argentina's government in the Trump era. Mamdani's office did not respond to a request for comment.

The remarks come as the mayoral race in New York intensifies debates over how to fund city services and whether the federal government would step in during a municipal financial crisis. Federal officials have long emphasized state and local fiscal autonomy, and critics of Mamdani argue that his revenue ideas would rely on aggressive tax increases and expanded government roles in daily life. Supporters say the proposals would address affordability and access by reshaping the city’s economy and social safety net, but opponents contend they could deter investment and complicate the city’s credit standing.

The exchange highlights the broader political fault lines ahead of the vote. Mamdani, a progressive figure in the city’s Democratic landscape, has argued for bold policy changes aimed at reshaping housing, transportation, retail access, and child care, financed by higher taxes on corporations and top earners. Opponents—both within and outside New York—have warned that such measures could destabilize city finances if implemented without broad federal support or national economic improvements.

Analysts note that the interaction also serves as a reminder of how federal fiscal rhetoric can become a focal point in local races, particularly when a candidate positions themselves as a notable departure from the status quo. The Trump administration’s stance on federal aid to large cities has been a topic of discussion in other contexts as well, though officials have stressed that federal responses to municipal distress depend on a range of factors, including the specifics of proposed policies and the city’s own financial health. The current discourse underscores a broader debate about the balance between local experimentation and federal financial assurances in major urban centers.