Should States Be Allowed to Declare Bankruptcy?

Wednesday, January 26, 2011

History of New York State's budget delays (Stephen Nessen/WNYC)

Forty-four states and Washington, D.C. anticipate budget shortfalls of over $125 million by the end of fiscal year 2011, according to the Center on Budget and Policy Priorities. Many state policymakers are blaming their budget crises on public sector employees, citing expensive pension plans. Crushing state debt has caused some federal lawmakers to consider a legislative remedy: allowing states to file for bankruptcy. But will declaring bankruptcy really solve states' pension woes? How will unions react? What other remedies exist for debt-ridden states?

Joining us is Steven Greenhouse, Labor and Workplace Correspondent for our partner The New York Times. Also with us is Governor Ed Rendell, former governor of Pennsylvania. 

Guests:

Steven Greenhouse and Ed Rendell

Produced by:

Jillian Weinberger

Comments [1]

David from Arizona

I think you need to be very careful about generalizing about unions. Some states, like Arizona, are right-to-work states. We don't so much have unions as we do professional associations ... and these associations are very weak because it's against state law (at least for teachers) to strike.

With this being said, word is that teachers in Arizona are going to have to fork over more for retirement in order for the state to continue making pension payments for retired colleagues.

I question whether robbing Peter to pay Paul is a good idea. Will our teacher retirement program still exist when I retire?

Jan. 27 2011 02:13 PM

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