California BudgetEric CantorState Bankruptcy

Rep. Eric Cantor: No State Bailouts and No State Bankruptcy

House Speaker John Boehner of Ohio, right, looks on as House Majority Leader Eric Cantor of Va., speaks during a news conference on Capitol Hill in Washington, Thursday, Jan. 6, 2011

In other words, the state as soverign entities in the government will have to figure out their own fiscal solutions for budget shortfalls.
House Majority Leader Eric Cantor (R-Va.) issued a new threat against a federal bailout for ailing state governments Monday as GOP leaders girded for a confrontation with President Obama over spending.

Heading into Tuesday’s State of the Union address, Cantor showed no desire for increases in virtually any area of the federal government, and he doubled down on his opposition to new proposed spending on infrastructure and education, even in areas, like transportation, where he acknowledged there were deficiencies.

Cantor flatly rejected any changes in the law that would allow state governments struggling with record budget deficits brought on by the economic recession and rising pension costs to restructure debt, including allowing them to declare bankruptcy.

“I don’t think that that is necessary, because state governments have at their disposal the requisite tools to address their fiscal ills,” the majority leader said, before going a step further.

“I think some … have mentioned this Chapter 9 equivalent for states is somehow going to stave off some kind of federal bailout — we don’t need that to stave off a federal bailout. There will be no bailout of the states,” Cantor said. “States can deal with this and have the ability to do so on their own.”

As it should be.

In California, the Democrat Legislature and Democrat Governor Jerry Brown have the ability to balance the budget without either asking Washington for a bailout or defaulting on its contractual obligations through a state bankruptcy law – which would need to be enacted by Congess and President Obama anyway.

They just need to have the political will.

What Rep. Eric Cantor, the House Majority Leader is saying is: Man up =“States can deal with this and have the ability to do so on their own.”