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Poll Watch: Most Voters OPPOSE States Declaring Bankruptcy
This is a very bad idea.States are currently not allowed by law to file for bankruptcy, but former House Speaker Newt Gingrich and others have argued that bankruptcy might be the least painful alternative for taxpayers in heavily debt-ridden states like California, Illinois and New York. Voters aren’t thrilled with the idea, but they like it better than higher taxes, and they’re even more supportive if told government employees might have their pensions reduced in the process.
A new Rasmussen Reports national telephone survey shows that just 17% of Likely U.S. Voters believe states should be allowed to file for bankruptcy if they are unable to pay their financial obligations. Fifty-four percent (54%) oppose bankruptcy for states, and another 29% are undecided.
But voter support nearly doubles to 32% when the question is phrased to include the possibility that government employees might have their pensions reduced if their state filed for bankruptcy. Fifty-one percent (51%) are still opposed to allowing states to declare bankruptcy, but only 17% remain undecided.
Twenty-seven percent (27%) of voters are willing to pay significantly higher taxes to keep their state out of bankruptcy, but 44% are not and prefer bankruptcy instead. Twenty-nine percent (29%) are not sure which course they like better.
State governments are sovereign and must be held responsible for their own fiscal mismanagement. California can solve its own financial crisis without a federal bailout or bankruptcy. Governor Brown and the California Legislature must exert the political will to do so.
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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.”