Why Mitch McConnell Wants States to Go Bankrupt

[JA]

Why Mitch McConnell Wants States to Go Bankrupt

States need help. Senate Majority Leader Mitch McConnell does not want to provide it. On The Hugh Hewitt Show on April 23, McConnell proposed another idea. Instead of more federal aid, states should cut their spending by declaring bankruptcy[.]

[...]

Bankruptcy, by contrast [with defaults], is a legal process in which a judge decides which debts will be paid, in what order, and in what amount. Under the Constitution, bankruptcy is a power entirely reserved to the federal government. An American bankruptcy is overseen in federal court, by a federal judge, according to federal law. That’s why federal law can allow U.S. cities to go bankrupt, as many have done over the years. That’s why the financial restructuring of Puerto Rico can be overseen by a federal control board. Cities and territories are not sovereigns. Under the U.S. Constitution, U.S. states are.

[...]

Since 2010, American fiscal federalism has been defined by three overwhelming facts.

First, the country’s wealthiest and most productive states are overwhelmingly blue. Of the 15 states least reliant on federal transfers, 11 are led by Democratic governors. Of the 15 states most reliant on federal transfers, 11 have Republican governors.

Second, Congress is dominated by Republicans. Republicans controlled the House for eight of the last 10 years; the Senate for six. Because of the Republican hold on the Senate, the federal judiciary has likewise shifted in conservative and Republican directions.

A state bankruptcy process would thus enable a Republican Party based in the poorer states to use its federal ascendancy to impose its priorities upon the budgets of the richer states.

[...]

Republican plans for state bankruptcy sedulously protect state taxpayers. The Bush-Gingrich op-ed of 2011 was explicit on this point. A federal law of state bankruptcy “must explicitly forbid any federal judge from mandating a tax hike,” they wrote. You might wonder: Why? If a Republican Senate majority leader from Kentucky is willing to squeeze Illinois state pensioners, why would he care about shielding Illinois state taxpayers? The answer is found in the third of the three facts of American fiscal federalism.

United States senators from smaller, poorer red states do not only represent their states. Often, they do not even primarily represent their states. They represent, more often, the richest people in bigger, richer blue States who find it more economical to invest in less expensive small-state races. The biggest contributor to Mitch McConnell’s 2020 campaign and leadership committee is a PAC headquartered in Englewood, New Jersey.

[...]

A federal bankruptcy process for state finances could thus enable wealthy individuals and interest groups in rich states to leverage their clout in the anti-majoritarian federal system to reverse political defeats in the more majoritarian political systems of big, rich states like California, New York, and Illinois.

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But McConnell seems to be following the rule “Never let a good crisis go to waste.” He’s realistic enough to recognize that the pandemic probably means the end not only of the Trump presidency, but of his own majority leadership. He’s got until January to refashion the federal government in ways that will constrain his successors. That’s what the state-bankruptcy plan is all about.

[T'Chenka]

I read that whole thing. This is just amother example of calllous Republican(s) putting self and party over their constituents. It's disgusting but it's been 100% normalized and has been for years and years.

[President Johnson]

The senate will never be the most deliberative body in the world as long as the old turtle is ruling it.

[President Punxsutawney Phil]

The senate will never be the most deliberative body in the world as long as the old turtle is ruling it.

pretty sure old turtles have even longer lifespans than people.

[T'Chenka]

The senate will never be the most deliberative body in the world as long as the old turtle is ruling it.

He's a lizard person or a re-animated demonic corpse.

[Fuzzy Bear]

It's an attack on public employees, most of whom belong to unions that support Democrats.

You'll know it if the bankruptcy provisions allow states to submit the claims of public employees' pensions for bankruptcy - with the exception of law enforcement. 

[PSOL]

What exactly is the plan if these more economically important states go under? If there is no more subsidies to give out to maintain this bankruptcy scheme, what then on the stability of this country?

[President Punxsutawney Phil]

What exactly is the plan if these more economically important states go under? If there is no more subsidies to give out to maintain this bankruptcy scheme, what then on the stability of this country?

You raise some very valid questions. But McConnell doesn't care about any of this. He knows the hurt it'll cause, and worst of all, it doesn't bother him.

[Amenhotep Bakari-Sellers]

The senate will never be the most deliberative body in the world as long as the old turtle is ruling it.

His wife Elaine Chao is inside Trump's WH, that's a conflict of interest

[QAnonKelly]

What exactly is the plan if these more economically important states go under? If there is no more subsidies to give out to maintain this bankruptcy scheme, what then on the stability of this country?

[T'Chenka]

What exactly is the plan if these more economically important states go under? If there is no more subsidies to give out to maintain this bankruptcy scheme, what then on the stability of this country?

Nah, McConnell can be bought and bargained with. He is as bad as an anarchist in terms of letting the world burn, but chaos isn't his goal or endgame.

[QAnonKelly]

What exactly is the plan if these more economically important states go under? If there is no more subsidies to give out to maintain this bankruptcy scheme, what then on the stability of this country?

Nah, McConnell can be bought and bargained with. He is as bad as an anarchist in terms of letting the world burn, but chaos isn't his goal or endgame.

McConnell only cares about power. He doesn’t care about money.

[T'Chenka]

What exactly is the plan if these more economically important states go under? If there is no more subsidies to give out to maintain this bankruptcy scheme, what then on the stability of this country?

Nah, McConnell can be bought and bargained with. He is as bad as an anarchist in terms of letting the world burn, but chaos isn't his goal or endgame.

McConnell only cares about power. He doesn’t care about money.

Agreed. I meant "bought" broadly, not literally or specifically referring to money.

[T'Chenka]

UPDATE
Some New York comedian WENT OFF on McConnell for this. I don't think he's that funny consistently and some of the insults sounded forced, but overall the spirit of this is very very welcome IMO.

"NSFW" - Lots of swearing but it's bleeped out.

Best line : "New Yorkers get up every f____ng day and fight traffic and overcrowding and go to work for this country. What do YOU do every day, you mint-julep-drinking f____ng ghoul with no chin?"

[Amenhotep Bakari-Sellers]

There wont be any states that go bankrupt, states like Cali can borrow $$$ on state bonds, just like the Federal govt is running a 22 T deficit on Federal trade deficit and Social Security surpluses in the form of IOUs. College math.

Anyways, Biden is likely to get elected and take back the tax cuts from the rich and raise the cap on the wealthy in Social Security, so both bonds and Social Security can run surpluses again.

Obama wanted "Grand Bargin", but Soeaker Boehner sabotaged it, and McConnell got in, so he could put the Scalia up before our fiscal House was in order, that's why we have a mess.

[cris01us]

McConnell won't drive states into bankruptcy.  The optics on that wouldn't play out very well for him or the party. 

[TiltsAreUnderrated]

McConnell won't drive states into bankruptcy.  The optics on that wouldn't play out very well for him or the party. 

He can pick and choose which get federal funding, and bullying safely blue states might not go down too badly.

[True Federalist (진정한 연방 주의자)]

McConnell won't drive states into bankruptcy.  The optics on that wouldn't play out very well for him or the party. 

You mean like the terrible optics that ensured he'd give Merrick Garland's nomination go forward to a vote?

[Koharu]

McConnell won't drive states into bankruptcy.  The optics on that wouldn't play out very well for him or the party. 

You mean like the terrible optics that ensured he'd give Merrick Garland's nomination go forward to a vote?

Or the terrible "optics" that meant he would give an impeachment hearing the decorum and time it deserves?

[Amenhotep Bakari-Sellers]

Cali, HI, AZ, NV and CO have some of the best bonds in the country, that's why entitlement $$$ is stronger than Midwesterm states. 


The country wont go bankrupt,  it's called bonds for states and Social security surplus borrowing for Fed govt as well as tarriffs