From Breitbart:
Mitch McConnell Floats Creating Bankruptcy Process for U.S. States
Wednesday during Hugh Hewitt’s nationally syndicated radio show, Senate Majority Leader Mitch McConnell (R-KY) said he favors allowing states struggling to meet their financial obligations due to the Chinese coronavirus pandemic to declare bankruptcy instead of providing a federal bailout.
From the interview:
HUGH HEWITT: I know when you put the CARES Act together, you used the task force, you used some of your best people like Marco Rubio. I have great respect for Lamar Alexander. A lot of the state governments are gonna be smashed up by this. But there is no Chapter 8 in the bankruptcy code. Who are you going to, you know, for states — no states can go bankrupt. Local governments can go bankrupt and reorganize. Who are you going to task to lead the effort on deciding what to do or not to do for the states?
SENATE MAJORITY LEADER MITCH MCCONNELL: I think it’s going to be a broad discussion without, you know, throughout the conference. I mean, we all represent states. We all have governors, regardless of party, who would love to have free money. And that’s why I said yesterday we’re going to push the pause button here, because I think this whole business of additional assistance for state and local governments need to be thoroughly evaluated. You raised yourself the important issue of what states have done, many of them have done to themselves with their pension programs. There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.
So this is a much bigger conversation than we’ve had providing assistance for small business because the government shut them out, put them down, put them out of business, or assistance to hospitals, which were overwhelmed by the COVID-19 disease. This is a very different decision. These are all taxing authorities, just like we are, and I think that’s why we need to have a fulsome conference-wide discussion among Senate Republicans before we go down this path.
Makes perfect sense - individual states set their parameters for spending. If they spend too much, they need to be responsible for this and not expect a bailout. Let them learn to set a budget and live within it.
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