Bush and Gingrich claim to strongly favor federal legislation to allow states to declare bankruptcy.
Check out the full article here:
view/20110131bankruptcy_protection_would_aid_states/
We're intrigued by the idea, which would appear to allow states to do an end run around crushing union contracts and pension systems that have busted state budgets nationwide. But, on the other hand, there seems to be an equity argument here, and we could see bankruptcy being used as a crutch providing cover to irresponsible state financial management and poor leadership (which is a bad thing). At the same time, what else can states do if unions aren't willing to work with states to find fiscal solutions?
So, we're asking our readers: what do you think? Good idea or bad idea? Please take a peek at the Herald and let us know your thoughts by posting a comment below.
Why should states be allowed to unilaterally void contracts because they made bad decisions?
ReplyDeleteThe problem I have with this is it screws the people who benefit from the pensions and salaries the states agreed to and planned lives based on them.
In the 2000s, a GOP controlled Congress raised the bar dramatically against PEOPLE seeking bankruptcy protection and preventing them from getting the same breathing room Newt and Jeb want to give states now.
Pensions and union contracts are just one piece of the budget puzzle. This basically lets Republican governors (and Dems) avoid going to taxpayers and asking for more taxes to pay for programs that voters want but don't want to pay for. Or, saying, you don't want to pay for it so we have to cut it.