Page 1 of 2 12 LastLast
Results 1 to 20 of 39

Thread: State bankruptcy bill imminent, Gingrich says

  1. #1
    Hall Of Fame
    Join Date
    Jan 2005
    Posts
    14,814

    State bankruptcy bill imminent, Gingrich says

    Cut and run from responsibilities?


    State bankruptcy bill imminent, Gingrich says
    By Lisa Lambert Lisa Lambert
    Fri Jan 21, 5:57 pm ET


    WASHINGTON (Reuters) Legislation that would allow U.S. states to file for bankruptcy will likely be introduced in Congress within the next month, Newt Gingrich, the former speaker of the House of Representatives and a powerful Republican party figure, told Reuters on Friday.

    Although Gingrich, considered responsible for the "Republican Revolution" of the 1990's, is no longer in office, he has deep ties to Congress and is frequently named as a potential presidential contender in 2012.

    For months he has championed letting states file for bankruptcy in order to handle their long-term budget problems despite resistance from states and investors in the $2.8 trillion municipal bond market.

    "We're faced with the danger that the states are going to try to show up and say to Washington: You have to give us money," Gingrich said. "And I think we have to have an alternative that allows us to say no."

    While he declined to comment on who might introduce legislation, Gingrich said there was support in both the House and the Senate. He said lawmakers have been looking into the idea for three or four months.

    Gingrich first publicly broached the idea in November, the same month the Republican party won control of the House in mid-term elections, largely on promises of reducing spending.

    But the legislation will likely face an uphill battle with Democrats still in control of the Senate and the White House.

    Because states are sovereign, they cannot declare bankruptcy as cities can, and most have provisions in their constitutions that make defaulting on debt next to impossible.

    And California -- a state which Gingrich said would likely turn to Congress for financial help along with New York and Illinois -- said on Friday it has no interest in using bankruptcy to solve its fiscal problems.

    California, the eighth largest economy in the world, would not benefit from the legislation, Treasurer Bill Lockyer said.

    "States didn't ask for it. We don't want it. We don't need it," Lockyer said. "Bankruptcy would devastate states' ability to recover from the recession and make the infrastructure investments that create good jobs."

    Struggling to close a $25 billion budget gap, California already holds Moody's Investors Service's lowest state credit rating -- a distinction it shares with Illinois.

    "Just the availability of a bankruptcy option and the potential bond default could severely damage state credit ratings and destroy the trust of bondholders," said New York State Comptroller Thomas P. DiNapoli.

    Last week, the municipal bond market suffered a sharp sell-off on fears of defaults by cities and other issuers.

    Representative Xavier Becerra, a member of the House Democratic leadership, said the bankruptcy idea is not new.

    "But it has never been taken seriously until now because Republicans are insistent on doing nothing to help the states," he told reporters on Friday. "I don't think that is a realistic solution. I don't believe it is a necessary solution."

    Hit hard by the deepest recession since the Great Depression, states' economies remain weak, even though the recession ended in mid-2009. State revenues are well below the levels reached before the recession, and high unemployment has driven up spending on public services.

    Lawmakers from both parties are concerned Congress may have to step in again with an expensive fix. There is little appetite on Capitol Hill for a repeat of the $814 billion economic stimulus plan passed in 2009.

    But along with the recession states are faced with permanent budget problems, including pension obligations they cannot cover estimated to total at least $700 billion.

    Filing for bankruptcy would allow them to renege on their pension promises and other obligations to state employees.

    "The very fact of the bill existing... allows governors to sit down with unions and say: 'Look you, negotiate with us or I'm taking the state into bankruptcy,'" Gingrich said.

    Under bankruptcy an employer can negate labor contract provisions, and state bankruptcy "may be a way to put additional pressure on public employee service unions to negotiate," said Howard Cure, director of municipal research at Evercore Wealth Management in New York.

    Still, said National Governors Association Executive Director Raymond Scheppach, no state is asking for the option of filing for bankruptcy in court.

    "The state would be tied up in terms of its own budgeting and running of state government. And who wants to give the responsibility of running state government to the courts?" he said.

    (Additional reporting by Thomas Ferraro in Cambridge, Maryland, Jim Christie in San Francisco and Joan Gralla in New York; Editing by Leslie Adler
    http://news.yahoo.com/s/nm/20110121/...tes_bankruptcy

  2. #2
    Hall Of Fame
    Join Date
    Sep 2005
    Location
    NC
    Posts
    19,179
    Quote Originally Posted by cr726 View Post
    Cut and run from responsibilities?



    CAN'T WAIT!

  3. #3
    Hall Of Fame
    Join Date
    Jan 2005
    Posts
    14,814
    Quote Originally Posted by southparkcpa View Post
    CAN'T WAIT!
    The GOP is the party of responsibility, right?

  4. #4
    Hall Of Fame
    Join Date
    Sep 2005
    Location
    NC
    Posts
    19,179
    Quote Originally Posted by cr726 View Post
    The GOP is the party of responsibility, right?
    and in showing responsibility to the majority of people footing the bill for these unsustainable contracts can never be present in any industry for obvious reasons.

  5. #5
    All Pro
    Join Date
    Mar 2007
    Location
    Fairfield County, CT
    Posts
    6,870

    Six-Figure Giveaway $inking NY

    Six-figure giveaway $inking NY

    By REUVEN BLAU

    No wonder the state has a $10 billion budget deficit.

    The number of retired state employees pulling down pensions of more than $100,000 surged a startling 43 percent last year, from 1,059 in 2009 to 1,513, according to the state Comptroller's Office.

    "This is like hitting the lottery -- virtually nobody in the private sector has a guaranteed six-figure income with health benefits," said E.J. McMahon, a senior fellow with the Manhattan Institute think tank.

    Four of the retirees make more than $200,000 annually, according to documents obtained by The Post through a Freedom of Information request.

    All told, the six-figure pensioners cost taxpayers $123 million a year.

    The spike in the $100,000-plus club is partially due to 6,372 employees who raced to take advantage of the state's early-retirement incentive offered by Gov. David Paterson's administration in an attempt to save $95 million this year.

    The early-retirement sweetener usually goes to state workers who were planning to retire anyway, raising long-term pension expenses, fiscal watchdogs and government insiders say.

    Between 1983 and 2002, state lawmakers approved 10 early-retirement bills, according to the Empire Center for New York State Policy. The most recent, in 2002, attracted 5,562 employees and added $249 million in pension costs over five years, the center said.

    "The system is just completely out of line with reality," McMahon said.

    At the state's largest pension system, employees contributed $284 million while state taxpayers shelled out $2.3 billion in payouts to retirees in fiscal year 2010, according to the Empire Center.

    About one out of every seven cops and firefighters from the suburbs and upstate municipalities who retired last year is receiving a six-figure state pension, according to data compiled by the Empire Center. That's because they are paid high salaries, and often pad their pensions by putting in huge amounts of overtime in their final years.
    http://www.nypost.com/p/news/local/s...-rss&FEEDNAME=

  6. #6
    All Pro
    Join Date
    Sep 2009
    Location
    Staten Island
    Posts
    9,033
    And yet the article directly below it in the paper discussing the almost half billion dollars spent last fiscal year on pension investment consultants is 1/4 the size. And not mentioned.

    Experts' money for nothing
    By SUSAN EDELMAN

    Fees paid by the city's pension funds to outside investment managers and consultants have quadrupled to $426 million since 2002 despite lackluster earnings, records show.
    "It's crazy. They're talking about laying people off and cutting teachers, while money is bleeding out of the budget for something that's not producing services," said John Murphy, former executive director of the city's biggest pension system, NYCERS.
    The lucrative contracts awarded to private equity and real-estate investment firms have skyrocketed from $101 million in 2002 to $426 million last fiscal year, or 322 percent. Meanwhile, overall assets of the city's five pension funds, including stocks, rose modestly from $80.6 billion to $89.9 billion, 11.5 percent.
    http://www.nypost.com/p/news/local/e...#ixzz1BssGE1fW

  7. #7
    Hall Of Fame
    Join Date
    Jan 2005
    Posts
    14,814
    Quote Originally Posted by southparkcpa View Post
    and in showing responsibility to the majority of people footing the bill for these unsustainable contracts can never be present in any industry for obvious reasons.
    How would you like this industry to operate? Fee for service? Every officer get $25.00 per arrest, fireman gets $50.00 per fire? You want to compare the private industry with the public sector, let's do it.

  8. #8
    Hall Of Fame
    Join Date
    Jan 2005
    Posts
    14,814
    The big problem the private sector has with the public sector is the public sector can't hide their numbers.

    The private sector just went to the big bad gov't and begged for money, now the gov't is too well paid?

    Give me a break.

  9. #9
    Hall Of Fame
    Join Date
    Sep 2005
    Location
    NC
    Posts
    19,179
    Quote Originally Posted by Jetworks View Post
    And yet the article directly below it in the paper discussing the almost half billion dollars spent last fiscal year on pension investment consultants is 1/4 the size. And not mentioned.



    http://www.nypost.com/p/news/local/e...#ixzz1BssGE1fW
    and imagine...if public employees had ONLY 401K plans like the rest of us, BOTH problems would go away. The investment fees are outgageous but probably represent less than 1/2 of one percent of total pension assets.

    Paying someone for 30 years of retirement for 20 or 30 years of work is going to bankrupt the states and municipalities. ANY pension greater than 1/2 base pay is a recipe for mathematical disaster. NO investment returns can solve this as we are learning.
    Last edited by southparkcpa; 01-24-2011 at 08:35 AM.

  10. #10
    Hall Of Fame
    Join Date
    Sep 2005
    Location
    NC
    Posts
    19,179
    Quote Originally Posted by cr726 View Post
    The big problem the private sector has with the public sector is the public sector can't hide their numbers.

    The private sector just went to the big bad gov't and begged for money, now the gov't is too well paid?

    Give me a break.
    In fact that is not correct..... the number one complaint of analysts is the numbers in the public sector are not accurate. The pension liability is estimated at 4 times the states estimates.

  11. #11
    All League
    Join Date
    Feb 2005
    Posts
    4,924
    The fact is they are overpaid and their Health and Retirements are bloated. You can raise all the taxes you want but the unions will always want more. Time to put the unions in their place!

  12. #12
    Hall Of Fame
    Join Date
    Jan 2005
    Posts
    14,814
    Quote Originally Posted by southparkcpa View Post
    In fact that is not correct..... the number one complaint of analysts is the numbers in the public sector are not accurate. The pension liability is estimated at 4 times the states estimates.
    Oh I forgot, the private sector never gives inaccurate numbers.

  13. #13
    Hall Of Fame
    Join Date
    Feb 2006
    Location
    Van down by the river
    Posts
    23,165
    Quote Originally Posted by southparkcpa View Post
    Paying someone for 30 years of retirement for 20 or 30 years of work is going to bankrupt the states and municipalities. ANY pension greater than 1/2 base pay is a recipe for mathematical disaster. NO investment returns can solve this as we are learning.
    Eliminate all financial "tools".

  14. #14
    Hall Of Fame
    Join Date
    Sep 2005
    Location
    NC
    Posts
    19,179
    Quote Originally Posted by MnJetFan View Post
    The fact is they are overpaid and their Health and Retirements are bloated. You can raise all the taxes you want but the unions will always want more. Time to put the unions in their place!
    Stop presenting facts........... it confuses some people.

  15. #15
    Hall Of Fame
    Join Date
    Sep 2005
    Location
    NC
    Posts
    19,179
    Quote Originally Posted by cr726 View Post
    Oh I forgot, the private sector never gives inaccurate numbers.
    Please stay on topic.

    Muni's will go bankrupt.

    How is that related to municipal bankrupt cases?

  16. #16
    Hall Of Fame
    Join Date
    Jan 2005
    Posts
    14,814
    Quote Originally Posted by southparkcpa View Post
    Please stay on topic.

    Muni's will go bankrupt.

    How is that related to municipal bankrupt cases?
    How about the Southern states? What unions are destroying those munis?

  17. #17
    Hall Of Fame
    Join Date
    Sep 2005
    Location
    NC
    Posts
    19,179
    Quote Originally Posted by cr726 View Post
    How about the Southern states? What unions are destroying those munis?


    NONE. Very fair point.

    The spending problem is so systemic and a result of over spending in ALL areas.

    The NC budget has DOUBLED from 2002 to 2007. WHY? Because tax revenues doubled form growth. They all spend about the same way. Instead of lowering rates or paying down debtm they create new programs.

    Government spends whatever you give them, In my "prior CPA life" I audited cities and towns and the actual spending in the last 2 months of the year in any muni was ALWAYS through the roof so they could justify the budget.

  18. #18
    All League
    Join Date
    Feb 2005
    Posts
    4,924
    What happens when the Treasury notes are downgraded. China comes knocking at the door! I hear the s--t hitting the fan!

  19. #19
    Hall Of Fame
    Join Date
    Jan 2005
    Posts
    14,814
    Quote Originally Posted by MnJetFan View Post
    What happens when the Treasury notes are downgraded. China comes knocking at the door! I hear the s--t hitting the fan!
    I don't know what happens? Explain it all to us.

  20. #20
    Hall Of Fame
    Join Date
    Sep 2005
    Location
    NC
    Posts
    19,179
    Quote Originally Posted by cr726 View Post
    I don't know what happens? Explain it all to us.
    Interest rates skyrocket.......

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

Follow Us