[snopercod]

I would like you to tell me which of the 18 powers granted to congress by the U.S. Constitution could be used to loan money to a state government. Seriously.

Section. 8.

                   The Congress shall have Power To lay and collect Taxes, Duties, Imposts and
                   Excises, to pay the Debts and provide for the common Defence and general
                   Welfare of the United States; but all Duties, Imposts and Excises shall be
                   uniform throughout the United States;

                   To borrow Money on the credit of the United States;

                   To regulate Commerce with foreign Nations, and among the several States, and
                   with the Indian Tribes;

                   To establish an uniform Rule of Naturalization, and uniform Laws on the subject
                   of Bankruptcies throughout the United States;

                   To coin Money, regulate the Value thereof, and of foreign Coin, and fix the
                   Standard of Weights and Measures;

                   To provide for the Punishment of counterfeiting the Securities and current Coin of
                   the United States;

                   To establish Post Offices and post Roads;

                   To promote the Progress of Science and useful Arts, by securing for limited
                   Times to Authors and Inventors the exclusive Right to their respective Writings
                   and Discoveries;

                   To constitute Tribunals inferior to the supreme Court;

                   To define and punish Piracies and Felonies committed on the high Seas, and
                   Offences against the Law of Nations;

                   To declare War, grant Letters of Marque and Reprisal, and make Rules
                   concerning Captures on Land and Water;

                   To raise and support Armies, but no Appropriation of Money to that Use shall be
                   for a longer Term than two Years;

                   To provide and maintain a Navy;

                   To make Rules for the Government and Regulation of the land and naval Forces;

                   To provide for calling forth the Militia to execute the Laws of the Union, suppress
                   Insurrections and repel Invasions;

                   To provide for organizing, arming, and disciplining, the Militia, and for governing
                   such Part of them as may be employed in the Service of the United States,
                   reserving to the States respectively, the Appointment of the Officers, and the
                   Authority of training the Militia according to the discipline prescribed by
                   Congress;

                   To exercise exclusive Legislation in all Cases whatsoever, over such District (not
                   exceeding ten Miles square) as may, by Cession of particular States, and the
                   Acceptance of Congress, become the Seat of the Government of the United
                   States, and to exercise like Authority over all Places purchased by the Consent of
                   the Legislature of the State in which the Same shall be, for the Erection of Forts,
                   Magazines, Arsenals, dock-Yards, and other needful Buildings;--And

                   To make all Laws which shall be necessary and proper for carrying into
                   Execution the foregoing Powers, and all other Powers vested by this Constitution
                   in the Government of the United States, or in any Department or Officer thereof.

We all know that modern Congresses do not feel constrained by these limitations, but I would like to hear your thoughts on which will be used as "cover" if they try this.

[Dog Gone]

I don't think they are talking about loans. I think they are talking about gifts.

I'm not sure this is any different than "Revenue Sharing", which I think was started under Nixon. And I certainly can't think of how it's constitutional, although that question may have already been litigated at that time.

[nygoose]

We all know that modern Congresses do not feel constrained by these limitations, but I would like to hear your thoughts on which will be used as "cover" if they try this.

The interstate commerce clause.

[Reaganwuzthebest]

Can't remember for sure, but didn't the federal government bail out New York City years ago, and they have given federally guaranteed loans to corporations like Chrysler. They always find ways to do these things don't they?

[Southack]

"I would like you to tell me which of the 18 powers granted to congress by the U.S. Constitution could be used to loan money to a state government. Seriously."

Congress has the explicit power to tax, thus, it has the implicit power to rebate, loan, or defer said taxes, and this could be done in a way in which the state has control of that money.

Loan guarantees could also be pitched as de minimus, since in theory no harm or effect is caused (so long as the loans are paid back).

Apparently such things are being considered due to several (at least 6) states being misrun as poorly as California.

Frankly, I'd like to see bankruptcy take them down, take their credit ratings down, and force massive cuts in their governments, but there is just no way that it is going to happen this early in the game. Even without federal help California could survive the '03-'04 budget cycles (but at some point after '04, that state is in for some real trouble).