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I think people are reading wayyyyy too much into McConnell's comments. Go back to the context and the statement he made, I don't think he's actually pushing for it just people getting frothy over empty words.
At a gut level, I agree. It was likely just a momentary diversion. Bottom line he is not supportive of bailing out public pension plans.
I do not see a Congress majority voting to amend the Federal Bankruptcy Code, no matter the party in majority.
A state bankruptcy has no impact on the accrued public pension benefits in 48 states.
A majority of these southern red states, LEECH off New York. You forget that NY gives more to the Feds than it gets back, while states like Kentucky recieve more than they put in. Face it, all the red states would go bankrupt without NY, California etc.
I say let them go bankrupt.
actually NY gets back .99 for every dollar is send to the feds... IOW new York breaks even..NY is not bailing out any other state
They should. Why should taxpayers in Texas bail out the Illinois pension system? The liberal states were warned for decades about their poor financial decisions. Let them go bankrupt.
Bankruptcy does not extinguish accrued public pension benefits in 48 states, if a Congress majority were to amend the Federal Bankruptcy Code to allow states to do so.
The whole issue does beg the question of mutualizes exposures Some states are more prone to hurricanes and flooding and FEMA flood insurance premiums do not cover losses. No way would some of these areas been built up and out had the Federal Government not underwritten losses. What does an Arizonan care about what happens in Florida or Louisiana?
Why do states compete for Federal money for local/ state specific infrastructure projects instead of self funding?
I am in no way advocating for a federal bailout of underfunded state pensions.
As an aside, your state (my former) has its own underfunded pension challenges including in local Republican strongholds.
Texas is in a very precarious position due to the oil glut. Texas will be among the first in line begging for a bailout, either directly to the state, or indirectly via bailouts to Big Oil companies, or both. So the problem is, once you play the "why should the citizens of X pay to bail out state Z" game, ultimately X will ask for help too. The whole country is in this together. A global pandemic by definition is a federal problem, not a state or local problem.
Another good example^
What if Congress did not cherry-pick winners or losers?
For example, no state gets a dime or every state gets a grant based on population or a grant based on per capita federal taxes paid or etc, to use as they choose?
The number infected with the virus is a factor of testing and rather meaningless, given most people are not being tested.
Texas is in a very precarious position due to the oil glut. Texas will be among the first in line begging for a bailout, either directly to the state, or indirectly via bailouts to Big Oil companies, or both. So the problem is, once you play the "why should the citizens of X pay to bail out state Z" game, ultimately X will ask for help too. The whole country is in this together. A global pandemic by definition is a federal problem, not a state or local problem.
1) The pension crisis in these states did not sneak up on anybody. These have been discussed for many decades.
2) Many states are not in trouble solely due to pensions.
3) The pandemic did not cause the pension issue, if they need a short term liquidity loan from the fed govt I would certainly support that, but not a bailout.
4) The states have the ability to raise taxes and other money raising techniques to address this issue.
You can't get blood out of a stone. When the coffers go dry Illinois will have to default. McConnell said the Fed wouldn't bail them out. Where Illinois goes from there I have no idea. I side with McConnell on this one--first time in my life, corrupt S-O-you know.
Illinois has a ton of ways to raise the extra money starting with tax increases.
Why should states be made to file bankruptcy while private businesses get bailouts? Is Mitch being a hypocrite?
The Federal Bankruptcy Code allows private businesses to bankrupt. It does not allow states to do so.
When a private business with a single employer pension plan shuts down, the PBGC, a federal government corporation, becomes responsible for pension obligations, typically at accrued values.
He's being ridiculous. Kentucky is and has been heavily dependent on federal money, they are a net "taker" state, they get more in federal assistance than federal tax dollars they send in.
Imagine if FDR said, "I'm sorry Hawaii that Japan attacked you. The damage they caused? You're own your own. If you can't afford to fix it, well, you can always file bankruptcy." A pandemic is no different than a war: it's a national problem that requires national leadership and funding.
1) Again, the pandemic did not cause this problem. Heck, if it got bad enough it would HELP the pension shortfall due to mortality on the elderly recipients.
2) The "net taker" thing is a bogus claim that I've repeatedly debunked here. Low population states with large military bases, interstate highway systems and so forth are not getting those funds solely for their own benefit but for everyone elses.
You can't get blood out of a stone. When the coffers go dry Illinois will have to default. McConnell said the Fed wouldn't bail them out. Where Illinois goes from there I have no idea. I side with McConnell on this one--first time in my life, corrupt S-O-you know.
States can cut costs and raise taxes.
Shoulda/ woulda/ coulda done that at least 30- 50 years ago.
If taxpayers had felt an immediate large bite after every local government, school district and state concession, no way would local, school district and state legislators been able to continue to do so.
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