The threat of the federal government providing State bankruptcy protections has disappeared from the news since it first surfaced, to much republican applause, six months ago. This is an ominous silence.
The fiscal crises most states are experiencing will necessitate their need to use bankruptcy protection. All State employees, or employees whose jobs or pensions exist per contracts with the State, should be alarmed because State bankruptcy protections will suddenly, if not overnight, take away your contractual rights. Chapter 9 bankruptcy protection is currently available only to municipalities. If Chapter 9 is applied to the states it will mean the reduction of any expected pension benefits for current employees and retired former employees. Contracts with current employees and with sub-contractors to the States will also be under the control of the court and likely dramatically reduced.
It has been a quiet four months since the idea of allowing the States to declare bankruptcy re-submerged. Spawned by David Skeel in an op-ed piece in The Weekly Standard the possibility of allowing the States to further financially assault their employees via bankruptcy was immediately seized upon by congressional legislators like Newt Gingrich. "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." From October 2010 to February 2011 the States bankruptcy proposal was warmly received by the Republican side of the aisle.
Read the rest of the article at Op Ed News
No comments:
Post a Comment