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LITTLE SUPPORT FOR STATE BANKRUPTCIES

Posted by Admin Posted on Feb 10 2011

It doesn't look like anyone on the Hill wants to save state finances.

About two weeks ago, conservatives in Congress floated the idea of allowing states to file for bankruptcy. Although supporters focused on reorganizing state finances, there was a growing concern among Democrats that filing was seen as simply a way to void contracts with state employee unions.

Meanwhile, Republicans AND Democrats in the House are not likely to vote for bailing out state budgets, leaving states on their own in coping with $125 billion of aggregate budget deficits this year.

The White House is looking for other ways to help states, such as the recent proposal to change Federal Unemployment Taxes.

 

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