The Republican duo said “Federal bailouts must come to an end.” They argued that “Congress must allow a safe, orderly way under federal bankruptcy law for states to reorganize their finances.”
Their proposal, they say, will be “fair, orderly, predictable and lawful approach,” to helping financially struggling states.
Gingrich had earlier made a prediction that the proposal would be introduced in Congress within this month. Representative Eric Cantor (R-Va.), House Majority Leader, had ruled out that possibility.
While cities can seek protection in federal bankruptcy court under Chapter 9 municipal bankruptcy, states do not have that option.
Gingrich and Bush cited the case of California which has a $25.4 billion budget deficit. The state is set to pay over 12,000 state and municipal retirees $100,000 plus each in pensions. One study says the unfunded pension obligations of the state amount to over half a trillion dollars. They also mentioned the cases involving Illinois ($15 billion budget deficit), and New York ($10 billion deficit).
The duo outlined the following courses of action for the proposed measure:
First, state bankruptcy has to be “completely voluntary.” Doing it otherwise would be unconstitutional as it violates the state’s sovereign immunity.
Second, the proposed bill should allow states who are in default or in danger of default “to reorganize their finances free from their union contractual obligations.” This would allow the state to terminate some or all of their contracts with government employee unions and put up new work rates, rules, etc.
Third, the proposed measure should allow states to restructure their debt and other contractual obligations.
And fourth, the federal judge assigned to review the state’s reorganization plan would only have the power to accept the plan (if permissible) or reject it (if inconsistent) under the federal bankruptcy law.
Gingrich and Bush said: “Federal taxpayers in states that balance their budgets should not have to bail out the irresponsible, pandering politicians who cannot balance their budgets.”
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TOPIC: Jeb and Newt
Jeb & Newt, just a couple of good ol’ boys who say what they are told to say; under the direction of the elite Ruling Class. Jeb & Newt also of couple of has-beens who should be largely ignored by The Public.
I say we try this out in Washington DC and Florida first. This would, of course, include a freeze on Jeb’s and Newt’s assets and most definately, their pensions. We’d better also ask if they’ve got accounts in other countries.
It seems States, such as New York for example, claiming to be strapped for cash, have a main concern over how to cover the rising enormous cost of the Pension Plans for Public Servants.
The answer seems to be eluding Governmental Officials. I for one Private U.S. Citizen strongly insist that the Governmental Officials solve their dilemma using the model they approved for the private sector!
Eliminate the Pension Plans; as was done and continues to be done to the private sector Working Class! Alleviate the enormous cost of the lucrative Pension Plans for Public Servants (which are paid for by the strapped-for-cash average Taxpayer) by compelling our Public Servants to take 401k Plans instead of Pension Plans! I have no problem with that action. Make it happen Mr. Governmental Official. Or could it be that you yourself are a benefactor of the lucrative Public Servant Pension Plans.
Private Citizens of the U.S.A., I implore you to speak out. You know what is going on. Silence is acceptance.
Author: James Madison, IV
February 2011 A.D.