States Need Bankruptcy Option


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Don’t count on the unions to act responsibly unless they are forced by a bankruptcy court to do so. Look at Detroit. The teachers union is perfectly willing to let the city swoon into a death spiral — led by its public schools — rather than concede any of its pay, benefits, pensions and work rules won at the bargaining table.

The city has closed half of its schools and will soon close two-thirds. Class size in high school will average 62 children. But the teachers will get every dime of their bonuses, pay and pensions. The union will even continue to control health insurance, providing it to its members at a markup one-third above that of private health insurance — paid by the taxpayer.

If the Republicans in the House just say no, Obama will use their refusal to pit them against the schoolchildren of America. He will frame the issue as Republican penury vs. the needs of our schools. And no speeches about profligate state spending will make any difference.

But if the GOP posits the alternative of a bankruptcy procedure for states, it will inject a third option — reform. Then, if Obama demands a cash bailout and states resist the bankruptcy option, they will have forced the curtailment of state services — not the Republican House. They will have demonstrated, conclusively, that they value the needs of their union overlords more than those of their constituents.

Finally, the Republican House should pass a state bankruptcy bill to break the political power of the unions and undermine the labor-Democratic Party coalition that does so much to animate and fund their congressional candidates. AFSME, SEIU, AFT and NEA — the Four Horsemen of the Apocalypse — spent a combined $200 million on politics in the last cycle.

Pass a state bankruptcy law and abrogate their contracts, and you destroy both their monopoly and their power — and, along with it, much of the financial base of the Democratic Party.

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  • Spider

    First Unions destroyed our industries sending them oversees because of inflated labor costs, now they asr destroying our state and municipal governments. Congress should pass this bankrupsy law for states immediately. This union stranglehold has to stop. Why should private sector employees making $15 an hour with few benifits pay more taxes to support union government employees making $45 per hour and lavish lifetime benifits?

    • scum

      It's called the free market system, bro. American industries moved their own factories overseas. And by the way, FORD just posted record numbers, and if I'm mistaken, a few of their vehicles are still built here. And why do you suddenly push for bankruptcy options for states? DO YOU NOT EVEN REMEMBER THAT ON THE TOP OF G.W. BUSH'S AGENDA WAS TO MAKE IT MORE DIFFICULT FOR INDIVIDUALS TO DECLARE BANKRUPTCY? At least be consistent ideologically, even if you remain clueless…

  • Jim

    We had unions during the 40s 50s and 60s and things were never better.

    However they were industrial unions. You are right about public employees keeping in mind teachers are not doing that well.

  • Hugh Murray

    If the states get bankruptcy laws, won't Obama make sure that money goes to the unions, and not the creditors, as happened with GM?

  • sflbib

    "In bankruptcy, municipal bondholders will — and must — be protected."

    Yes, we've got to protect those Kennedy's at all cost. Remember the impending New York City financial meltdown 20 or so years ago? In the debate over whether the federal government should bail the city out, it was discovered that the Kennedy's held some of the city's tax-free municipal bonds.

  • http://www.intellectualconservative.com Steven Laib

    The industrial unions served a purpose in obtaining safe working conditions and better pay for the workers at a time when there wasn't a true level playing field. In non-industrial situations there is no real need for unions, particularly in government employment.

    These government employee unions exist primarily for the purpose of political power. The states that won't simply tell them to take a hike deserve what they get. President Reagan had the right idea in dealing with the air traffic controllers. The states can follow his lead if they want to. After all, impossibility of performance is a defense to completing a contract. Commercial or employment contracts that lead to the death of one party should fall under that rule.

  • Quarkonntn

    Any state that cannot or will not institute reforms to avoid bankruptcy but instead relies on the federal government to pay its' obligations should revert to a territory. What is now the Canadian Province of Newfoundland and Labrador was once the independent Dominion of Newfoundland from 1907 to 1934 when it reverted to a British colony because of the Great Depression. Freckless States like California, New York or Illinois should not be allowed to elect Congressmen or Senators to vote for subsidies from more responsible jurisdictions.

  • hthangel

    The revocation of statehood is a great idea. Turning them back into federal territories would have many benefits. Imagine the US Marshall's patrolling Chicago. It just might be the tonic needed to fix that mess

  • Lady_dr

    Dick, cutting education would be GREAT! Recent studies show that most students learn very little in four years of college. And I can tell you that they often come to college with very little education when they arrive at college – hence the remedial reading classes for college freshmen.

    ACCORDING TO THE CONSTITUTION _ the Federal government has NO business being in the education business. And frankly there is a principle here – if something is free it isn't valued. Just open you eyes – an enormous number of public school students have the latest fashions, ipods, and all the latest of everything. Yet their "education" is free.

    Books have been written on why public education is bad – the bottom line – is is free and government run.

    • scum

      This just sounds like Tea Party demonology to me, nothing more…