Gingrich Seeks Bill Allowing State Bankruptcy to Avert Bailouts

Posted on January 10, 2011 at 4:55pm by

Move afoot to help states escape benefit obligations – Former House Speaker and possible GOP presidential contender Newt Gingrich is pushing for federal legislation giving financially strapped states the right to file for bankruptcy and renege on pension and other benefit promises made to state employees.

Proponents of the measure – which include Americans for Tax Reform, a Washington lobby group that fights tax increases – said the legislation is desperately needed to clear the way for struggling states to slash costs before they go belly up, and should be regarded as a preemptive move that could preclude the need for massive federal bailouts.

“It’s in the short-term and long-term interests of government workers and taxpayers to start those reforms now, rather than having to pick up the pieces after a crash landing,” ATR President Grover Norquist said in an interview. [Continue reading]



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