Lawmakers Oppose Federal Bailout for States

[unhappycamper]

For the coming fiscal year, the 50 states face combined expected deficits of $125 billion, according to the liberal Center on Budget and Policy Priorities. Unlike the federal government, nearly all states are required by their constitutions to balance their budgets. Now, the GOP is spearheading an effort to vilify government workers and create a pathway for state bankruptcies.


Lawmakers Oppose Federal Bailout for States
Published on Wednesday, February 9, 2011 by Associated Press

WASHINGTON — The new Republican-led House is showing no appetite for making federal taxpayers help state and local governments cope with widespread budget problems. Even some Democrats are wary, underscoring the impact of Washington's crushing budget deficits.

For the coming fiscal year, the 50 states face combined expected deficits of $125 billion, according to the liberal Center on Budget and Policy Priorities. Unlike the federal government, nearly all states are required by their constitutions to balance their budgets. Now, the GOP is spearheading an effort to vilify government workers and create a pathway for state bankruptcies. "The era of the bailout is over," Rep. Patrick McHenry, R-N.C., told a House hearing on the debt problems facing scores of states and municipalities around the country.

At the same hearing, Rep. Mike Quigley, D-Ill., said states need to erase their deficits and face up to their long-term obligations such as pensions for government workers on their own. He also criticized a proposal some conservatives have made that Congress pass a law allowing states to reorganize their debts by declaring bankruptcy, an idea that opponents say would send state borrowing costs soaring.

"I don't think either one of those options can work or are optimal," Quigley said.

McHenry chairs a subcommittee of the House Oversight and Government Reform Committee that oversees federal bailouts, which was holding a hearing on the issue. Quigley is the top Democrat on that panel.



unhappycamper comment: $125 billion is less than it costs the United States to occupy Iraq and Afghanistan for less than a year. Just sayin.....