jeb bush wants states to declare bankruptcy so they can screw union workers

[Hannah Bell]

The new Congress has the opportunity to prepare a fair, orderly, predictable and lawful approach to help struggling state governments address their financial challenges without resorting to wasteful bailouts. This approach begins with a new chapter in the federal Bankruptcy Code that provides for voluntary bankruptcy by states, a proven option already available to all cities and towns across America.

There has been an organized federal bankruptcy process for municipalities since the 1930s, and a handful of cities, towns and counties — most notably California's Orange County in 1994 — have gone through municipal bankruptcy and gotten their fiscal houses back in working order. A bankruptcy option for the states would look very similar to Chapter 9 municipal bankruptcy, with some necessary modifications.

Second, as with municipal bankruptcy, a new bankruptcy law would allow states in default or in danger of default to reorganize their finances free from their union contractual obligations. In such a reorganization, a state could propose to terminate some, all or none of its government employee union contracts and establish new compensation rates, work rules, etc. The new law could also allow states an opportunity to reform their bloated, broken and underfunded pension systems for current and future workers. The lucrative pay and benefits packages that government employee unions have received from obliging politicians over the years are perhaps the most significant hurdles for many states trying to restore fiscal health.

Third, the new law should allow for the restructuring of a state's debt and other contractual obligations. In a voluntary bankruptcy scenario, states, like municipalities, will have every incentive to file a reorganization plan that protects state bondholder claims and their ultimate recovery. States will evaluate their future access to bond markets and their prospective borrowing rates as they formulate the optimal restructuring plan..

http://www.latimes.com/news/opinion/commentary/la-oe-gingrich-bankruptcy-20110127,0,4958969.story


There you have it; workers' "lucrative" pay & benefits is the problem & "protecting bondholders" is the objective.

[dkf]

1. Obama did the opposite... He protected GM workers and let the bondholders get the shaft.

Ironically that probably hit a bunch of pension funds.

[Hannah Bell]

2. he did no such thing.

[dkf]

5. What was this then?

http://www.washingtonpost.com/wp-dyn/content/article/2009/05/25/AR2009052502135.html

While the Obama administration has been playing hardball with bondholders, it has been more than happy to play nice with the United Auto Workers. How else to explain why a retiree health-care fund controlled by the UAW is slated to get a 39 percent equity stake in GM for its remaining $10 billion in claims while bondholders are being pressured to take a 10 percent stake for their $27 billion? It's highly unlikely that the auto industry professionals at GM would have cut such a deal had the government not been standing over them --

[Hannah Bell]

6. That is an account which elides the inside baseball & future payoff of the deal.

[dkf]

7. Huh?

[malaise]

3. Do these fuckers ever have enough

How much more do they want?

[geckosfeet]

4. That's right. Not enough of the slave class these days. Got to protect the slaveholders.

[Doctor_J]

8. Should probably read "Obama's education guru Jeb Bush..."

since they're officially pals now

[badtoworse]

9. This is nothing new. There is a pecking order in any bankruptcy proceeding

As I understand it, bondholders are at the head of the line.

[WinkyDink]

10. That will be PRESIDENT Jeb to you soon, OP.

[adigal]

11. I put money into my pension fund, it is MY money

not the states. I pray NY doesn't get this crazy.

[The Backlash Cometh]

12. What an incredibly irresponsible man. Quick! Let's make him president!

[MichiganVote]

13. K&R

[Dawson Leery]

14. The Bush family has done more than enough harm to this country and the world.

If the states are allowed to default, their bond ratings will take a hard hit, in turn that will hurt the standing Federal debt

[Oasis_]

15. Precisely

Which is why I don't believe any state would actually attempt to default. It's a tactical maneuver designed to scare public unions into accepting major, major concessions.

Unions in this country,and now on the individual state level,are facing an unrelenting and unmerciful attack against their very existence as workplace representatives.

2012 HAS TO BE the election where we take the fight to them, because it's really becoming a question of basic survival for the Unions.

Oasis

[badtoworse]

16. It's not a question of allowing them to default

It's a question of what to do if that happens. What do you think a state that is facing insolvency should do? What should creditors (e.g. workers, pensioned retirees, suppliers and bondholders) should do if a state says, "We're broke. We don't have the money to pay you."? What would you do if you were the governor? What would you do if the state owed you money and didn't pay?