Of cuts and cutlets

When spending>receipts, that=deficit.  And when there's year after year after year of deficits and you're a state, that leads to California, Illinois, and....New York.

A few days ago, the NYT ran this story:

Path Is Sought for States to Escape Debt Burdens

By MARY WILLIAMS WALSH, Published: January 20, 2011

Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.

Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.

But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.

Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides...

In addition to the question of whether or not a sovereign state can declare bankruptcy under the Constitution, there are other issues such as how much credibility such states will have in bond markets in the future, the constitutionality of the judicial branch directing the actions of the executive and legislative branches, what to do re: public employee pensions that are actually enshrined in state constitutions, the moral hazard involved if spendthrift states are allowed to declare bankruptcy—lots of grist for the blogging mill.

Reuters reported today, however, that 

U.S. House of Representatives Majority Leader Eric Cantor said...that he does not support any federal bailouts for states or allowing them to declare bankruptcy.

Cantor, speaking to reporters, was reacting to reports last week that some fellow Republican members of Congress were preparing legislation allowing cash-strapped states to declare bankruptcy.

"I don't think that that is necessary because state governments have at their disposal the requisite tools to address their fiscal ills," Cantor said.

Last week, Newt Gingrich, the conservative Republican and former House Speaker, told Reuters that legislation was being prepared in Congress to let states declare bankruptcy -- an idea that the potential 2012 presidential candidate had been talking up.

Gingrich's remarks came despite resistance from states and investors in the $2.8 trillion municipal bond market to such a move.

I don't have a crystal ball so I don't know how this will play out—bankruptcies, bailouts, just plain collapse—but ultimately, spending will have to be massively cut back. And as soon as you start talking spending cuts, the "why-do-you-hate-(fill in the blank—children, old people, animals, fresh air, clean water...)" groups start crawling out from under every available rock. To wit:

New group joins N.Y. school aid fight


ALBANY, N.Y. -- A new, well-financed partnership plying both fundamentals of democracy and modern high-stakes lobbying plans to bring Albany's fight over public school aid into New Yorkers' homes.

The Alliance for Quality Education, a school advocacy group that helped unseat some incumbent senators in November, is joining with the powerful New York State United Teachers union to protect school funding....

"This is a different approach to politics," said Billy Easton of AQE. "This is based on the idea that all politics is local and the best way we can influence the outcome here in Albany is what we do on the ground in people's districts, and how successful we are in engaging communities in what's happening," Easton told The Associated Press.

NYSUT is providing AQE with $425,000 for use over four months to pay for staff in several counties statewide, many represented by potentially vulnerable senators. The funding will pay for rallies, local news events, phone banks to build pressure on Albany, mailings and door-to-door campaigns. It aims to mobilize clergy, parents, teachers and community leaders around their schools.

Seven more full-time organizers will operate from new offices....

But what Easton calls "bottom-up pressure" isn't aimed at Cuomo....

"Bottom-up pressure"? Shades of Van Jones? But whether this spokesman is a true believer or is just jerking our chains, it's true that AQE will certainly benefit from the largesse of NYSUT.  

Now maybe education and how it's funded is not your pet peeve.  Maybe it's something else that really hacks you off.  But no matter what it is that makes you mad, the pattern is always the same—the other side always seems to have a sugar daddy, whether an individual or a group, with deep pockets who makes it possible for them to pursue their agenda while we have—chicken BBQs.  Now don't get me wrong—I like chicken BBQs as much as anyone. But really—where is our NYSUT? Why are we always limping along trying to scrape together minimal resources when the opposition never seems to be hurting for cash or warm bodies to get the work done? Anybody?

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