Posted on 01/26/2011 5:14:55 AM PST by Kaslin
When state governments -- facing intractable budget problems -- come to the Republican House asking for more bailout money, most GOP congressmen are determined to speak with one voice and say "no." But where will the "no" leave the states and their citizens? Can they fix their fiscal woes by their own efforts?
They can raise taxes, of course, and set their states on a death spiral akin to that which has already destroyed Detroit and much of upstate New York. Or they can cut spending, slicing the heart out of vital services like education and police protection. Cuts of this magnitude will almost destroy the education of a large part of this generation of students.
There is a third way: to get to the root of the reasons for their dire crisis in the first place and abrogate their collective bargaining agreements with municipal unions that have brought them to this condition.
States cannot do so on their own. They need the federal government to adopt a bankruptcy procedure to allow them to do it. States are constitutionally bound to honor contracts, so it is only through a federal bankruptcy court that they can be released from the ill-considered and overly generous agreements that bind them.
In bankruptcy, municipal bondholders will -- and must -- be protected. But the bankruptcy court can offer states the option of renegotiating their union agreements to avoid raising taxes or eviscerating their schools. (States would not be forced into bankruptcy, but would enter it voluntarily, seeking the protection of Chapter 9.)
Even if the states had the legal means to get out of their union contracts without federal intervention, they could not do so politically. Union political power is too entrenched to be dislodged even by a determined governor and state legislature.
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.
joe fonebone for education czar during a transition phase leading to the dismantling of the Department of Education (and even more savings)!
Yes, the unions are the first place to start.
“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.”
I like ole Dick Morris and I hope the Feds enable, through appropriate legislation, bankruptcy for states and cities. That said, ole Dick is engaging in some hyperbole here. As every experienced businessman knows, “when a businessman’s business (the states/cities in this case) runs out of money, bankruptcy is a total waste of time and attorneys fees”. Just shut off the phones, faxes and email and move out of your offices with NO forwarding address and go start up another business!
Only about 3 out of every 100 creditors will EVER catch up to you and you settle with them...........over time, indeed “a long time”. That is the brutal truth about a “failed” business. The “pain” is spread out over all those unfortunate enough to have gotten sucked in.
Judges ordered Pritchard, Alabama City officials to pay up under threat of contempt of court..........the “officials”, sitting on over-drawn checking accounts, just laughed at them and said “with what”................
Along about that time, a union employee looking in the mailbox for his pension check, and who was only in his fifties, killed himself. He will be forgotten and the politicians and their union thug buddies will continue lying to their minions until the money just simply isn’t there. Then what? I don’t know but I have been around long enough to remember the Marines in Los Angeles and the Army in Detroit. Both under heavy gun fire and buildings burning and scores dead.
If he is correct about this, the middle class has to look to itself as the reason the government keeps growing.
How many of the functions of government (state and federal) do you support that have no constitutional basis?
You can take it a step further and ask yourself whether those functions are violations of someone's property rights or would be more efficiently done by someone in the private sector.
Congratulations for being the first to point out that idiotic Hobson's Choice.
These are the natural places to start to pressure the sheeple to elect politicians to raise taxes.
Not only are the goody-goody union contracts left untouched, but so are lots of other schemes to buy influence such as "investing" in new downtown buildings for fascist style alliances with those well-placed in the business community, building expensive new sports palaces for owners who could easily afford to do their own and the general WAM (walking around money) mentality which put Pennsylvania so deep in the red after eight years of misrule by Rendell's regime.
Here in our county, we have two contrasts in reaction to state funding cuts:
I'll give you three guesses as to which is staffed by AFSCME employees.
Who would that be? The federal government seems to be the logical answer. Under what authority would it be done? On paper, the federal government is just a creation of sovereign states and a lesser entity than any one state. How's that gonna work?
What precedent is there for this? I can think of only Reconstruction. Lincoln set up a military dictatorship in the South.
Let's see Obama set up a military dictatorship in Illinois and California.
They would definitely deserve it.
Only three times as many? Hell, in many districts in Pennsylvania, the number of administrative personnel almost equals the number of classroom teachers.
My high school (1973 graduate) had about 800 kids and was exactly as you describe. In a pinch, the principal could teach math, and was quite good at it. The vice principal could teach science and lets just say it was easy to see why he became an administrator.
States like California should be forced (allowed) to resolve their own problems.
“”State bankrupty is not just a horrible and atrocious idea, it is raw evil at work.””
Well stated my friend.
That option being to take the bankruptcy process as a cafeteria selection and pick out what is beneficial to them.
Why should the obligations of the state of California be wiped away? So what, the Dims get to buy voters for 50 years and then when the bills drive them to the poor house, the mean Republicans come in and save the day by taking away the fairly negotiated benefits?
No, I'm afraid that I did indeed read the article and find it a cop out. Let them deal with the Leftist results of their Leftist policies. There is no need for federal intervention here.
If a Leftist state suffers the consequences of its Leftist choices, all the better example to the rest of the nation.
The reason those are always the first to get cut is that people will scream the loudest about it.
When I had a poll taker ask about proposed cuts to the police force, I said “OK, what else?”
Kind of shocked her. There are places to cut, but by bringing out the cops and teachers first, most sheep will knuckle under and pay more taxes.
What I believe you are both missing is that these states are not locked into these outrageous contracts forever, just until they come up for renewel. They are then free to renogiate or even to pass legislation disallowing public sector unions.
The Leftists in these states are now stuck in the unfavorable position of telling their paid constituancy “No more graveytrain” or continuing the death spiral. A choice ultimately up to the voters of that state.
If you give them this “third way”. They will renig on the outrageous promises they made to get elected without paying a political price.
All of the Republicans and just enough Dims will vote to renig on the contracts, along with a Dim Gov. The Republicans will then be demonized, the Dim Gov. exchanged for a new Dim Gov., and the Leftists will gain ground in the next election promising to give back what was taken from the poor unions.
Even a total death spiral would be benecial to the rest of the country. Perhaps a failed bond offering and no state checks in California would have a sobering effect across the nation. It would also pave the path concerning what actually constitutes necessary government spending.
I'm not missing it. A five year contract foolishly negotiated by an administration that was pandering for votes means that even if you replace the administration, there is little they can do to address the problem.
They are the people's elected officials and the people gave them the authority to negotiate those contracts. Bankruptcy is a process through which someone can gain relief when it is no longer possible for them to fulfill their obligations.
I believe bankruptcy has a place in our society, but it must be as fair and equitable as possible. Having union contracts be the ONLY obligation that can be renegotiated doesn't seem fair.
This doesn't seem like the proper way to limit the power of unions. You shouldn't limit power by giving the government power to negotiate in bad faith and then back out.
As a taxing authority with a great deal of leeway in how they spend the majority of their funds, they can fulfill their obligations. They just can't do it and do all of the other things they want to do.
I believe bankruptcy has a place in our society, but it must be as fair and equitable as possible. Having union contracts be the ONLY obligation that can be renegotiated doesn't seem fair.
All contractual obligations are equal, but there are no contractual obligations for the majority of the state's spending. The voters of those states chose political leadership that promised them a free lunch. Now those voters will have to pay for their bad choices.
This doesn't seem like the proper way to limit the power of unions. You shouldn't limit power by giving the government power to negotiate in bad faith and then back out.
Precisely! The public union sector will only be dealt with when the majority of people are drug to the conclusion that they can't afford them and their "evil" rich and corps can't afford them either.
The last thing we should do is bail out bad Dim decisions.
In normal bankruptcy (not run by Obama) employees have first dibs on the assets of the entity to cover compensation for work already done. Second are the parties owed monies for work or goods delivered. Third are the entities debt holders. And last are stock holders.
In the case of states, stock holders do not exist, but another party does. That is the citizenry of the state. They are held accountable to meet the obligations of the state with their personal funds. Now the courts cannot legally raise taxes, but they can direct available funds once collected.
These state failures have the potential of turning a large number of people into economic conservatives. And in truth, that is the only thing that can ultimately solve their problems.
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