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“I would certainly be in favor of allowing states to use the bankruptcy route,” he said Wednesday in a response to a question on the syndicated Hugh Hewitt radio show. “It’s saved some cities, and there’s no good reason for it not to be available.”
The host cited California, Illinois and Connecticut as states that had given too much to public employee unions, and McConnell said he was reluctant to take on more debt for any rescue.
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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First time poster, while bankruptcy seems like a nice fix it is really not the solution. If we believe at all in our Constitution and Federalism then the only end result is a default on Illinois obligations including pension holders by the State of IL it is after all a sovereign state and should not be subject to a different set of laws that overlap with its own. I believe this article captures the ultimate solution. In the end the pain is the same but the agony is probably greater.
https://www.nationalreview.com/2020/04/states-should-not-receive-bankruptcy-protection/
Nice post Sidd. Do you still have heat on that fastball of yours?
Very good opinion piece that brought up some points I hadn’t considered. Now I would have to say I’m against both bailout and bankruptcy. Unfortunately this administration is completely unwilling to make the hard choices that need to be made to get Illinois solvent. I believe Pritzker will shut down services and funding to local governments creating even worse conditions and higher property taxes in Illinois rather than reform pensions.
New York Gov. Andrew Cuomo said about Mitch’s idea to file bankruptcy: “This is really one of the dumb ideas of all time.” Then he goes on a rant about how the economy will collapse if bankruptcy is allowed for states, and that it’s cruel not to fund local municipalities along with businesses.
Given such vitriol, and hatred coming from Andy, methinks Andy knows its a great idea but he can’t say it outloud. So he does the opposite and bashes it, but in a few months, with a $12,000,000,000 deficit, he might reconsider.
If U seriously think this RINO wont fold when the time comes then give me some of what ur smoking cause this spineless jellyfish never holds fast he`s to blame for most of the national debt
If U seriously think this spineless Rino wont fold when the time comes then give me some of what ur smoking
Illinois Democrats have believed since 2007 that somehow a Federal bailout was coming. Yet it didn’t happen with Obama, and it’s not going to happen with Trump. Illinois Democrats are going to have to finally be held accountable, and their special interest the public employee unions had better be ready for MASSIVE, permanent cuts.
Like your thinking but as long as mike Madigan aka the weasel is still around it will never ever happen. That man would rather see the taxpayers of Illinois bleed to death, then come to his castle and beg for mercy.
Mitch McConnell has a gold plated pension and gold plated health benefits for life, which we as taxpayers pay for. Yet this moron would eliminate you and your neighbors pensions and social security if he could get away with it, and he would not have one once of empathy for the working person paying for all of his gold plated benefits. McConnell has conflicts of interest galore that enrich both him and his wife and their extended families globally. This is not a person that I want advice from regarding my families benefits as they head into their golden years!!!… Read more »
You failed at your logic course in high school. Mitch’s pension is irrelevant to the state of IL’s pension. IL is insolvent. It needs to go bankruptcy to reduce your pension.
My logic is fine. Your reading comprehension leaves much to be desired. First of all you talk about Mitch as if he is your buddy. Second, “Mitch’s” pension is extremely relevant to the State of Illinois, as our, yours and mine, taxpaying dollars are being shipped to D.C to fund his gold plated benefits’. Third, I do not recall stating I had a public pension, that you in all your infinite wisdom assumed I did, and bankruptcy seems to be your creative solution to our states problem. When your buddy “Mitch” pulls the plug on you and your family’s Social… Read more »
We should only get back in SS payments the amount our we and our employer contribute. After that you are on your own. Police, fire, teachers should receive a pension no greater than the maximum SS payout, if that. They are not special.
So, Frank, you’d expect absolutely no interest due you on any of those payments made over multiple decades of employment, right? Apparently you’re first sentence suggests you’re fine with that. But, isn’t that like making those required payments into a checking account paying no interest–a move no financial advisor would ever sugget to you? If you’re still fine with that idea, then maybe you’d like the same deal for SS retirees. Seems fair, right? If so, maybe you’d care to forego the otherwise automatic update given for your SS payments made year ago to account for the present inflation-adjusted value… Read more »
The only people who support IL pensions are pension recipients. The rest of us are resentful of your ilk.
Again, IL’s underfunded and insolvent pension is not relevant to Mitch’s federal pension.
Well there you go again debtsor, “The rest of us are resentful of your ilk”. If in fact Kentucky has been taking out substantially more from the federal coffers for years, i.e. $148 billion last year alone, this would suggest Kentucky has been insolvent for years, and being bailed out due to the contributions of States such as New York and Illinois. Thus, this clown, BK Mitch, is the last person that should be doling out advice to us in Illinois. Thus, Kentucky has been insolvent for years and being bailed out by numerous Blue States, so enlighten me debtsor,… Read more »
My neighbors the retired teacher and fireman also have gold plated pension and gold plated health benefits for life, or so they think. Both are incredibly arrogant and think ‘private sector’ is some kind of fictional concept.
They’re really arrogant, I know them personally. I like them as people, but I don’t like their arrogance.
Hey Eye in the Sky. Your on the wrong site if you want sympathy. Have a nice day.
Hey DantheMan, do you and debtsor realize that blue states such as Illinois and New York put substantially more into the federal coffers than they receive in return? Do you realize that we are supporting states such as Kentucky, which debtsor’s good buddy Mitch represents? Do you also realize that Creative Mitch’s brainless and flippant solution of proclaiming bankruptcy for us as the path we should undertake, while his great state of Kentucky takes out approximately $148 billion more from the federal coffers than they contribute? No DantheMan, I am not looking for sympathy, I just refuse to take ill… Read more »
Eye, you keep avoiding the very issue here, regardless of what anyone thinks of Mr. McConnell. He is bringing this up BECAUSE Illinois is insolvent and asking for free money from others, or debasement of the currency so they can continue the charade. If IL weren’t in this situation, he wouldn’t be talking about them, by definition. How again is he to blame here? You keep distracting from the main points, that is, the reality of this being a local problem — your ire should be directed at politicians and the protected class of public workers, both of whom worked… Read more »
I beg to differ here Juicy, but if you take your logic regarding Illinois being insolvent and asking for free money from others, where does that leave Kentucky? If as reported Kentucky is and has been taking out more money from the federal coffers than it contributes, $148 billion last year alone, and states such as New York and Illinois which have ben contributing substantially more to those same federal coffers than they get back in return, doesn’t that mean Kentucky and BK Mitch have been insolvent for years and States such as New York and Illinois have been bailing… Read more »
Wow. This sounds like the squeals of an SEIU or AFSCME piglet who is about to get yanked off of the taxpayer funded teat. It’s a cold harsh world out there when you have to work a full day for a full day’s fair wages. SSSQQQQQUUUUUEEEEAAAALLLLL!!!!
Or work a full 45 years to get a gold-plated pension.
Wow!!! That was deep, enlightening and insightful. When you are sitting at home on a Saturday or Sunday, enjoying your cocktails after a hard weeks work for your fair weeks wages. Ever contemplate the sacrifices the hard working people in the Union Movement made on your behalf, so you could have your weekends to ply your cocktails, and serve up these pearls of wisdom to the rest of us!!
Lets see early unions such as Teamsters were controlled by mobsters and today they’re little more than a campaign finance source for corrupt Democrats. At their peak in 1954 unions only represented 34% of hourly workforce which has dwindled to the current 11% yet somehow this myth persists with union people that unions created all work related benefits. Laughable.
“Yet this moron would eliminate you and your neighbors pensions and social security if he could get away with it, and he would not have one once of empathy for the working person paying for all of his gold plated benefits.” So you don’t think Pelosi, Schumer nor any other politician regardless of party have gold plated pensions, any conflicts of interest, enrich themselves or give a crap about the working class. If you bothered to comprehend McConnells comments he did not presume bankrupty was the only solution he was asked about it and said he would favor bankruptcy over… Read more »
” If you over extend your debt load to the point you can’t afford to pay your bills do you cut expenses or ask family members to bail you out while you take on even more debt?”
They do, actually, and it just encourages them to go further into debt.
If Trump is smart, he will use the pension crisis to his advantage. Here’s what to say, “If Biden wins, he will bail out states like Illinois and make you pay for it. Illinois has a huge bloated government and powerful public unions with big pensions. Illinois can’t pay for them so they want other states to pay it for them. I’m not going to raise the federal taxes on California, or Texas, or Florida to pay Illinois public pensions.” A message like that should resonate with the independent voters, except in Illinois, but Trump has no chance in Illinois… Read more »
As much as I would like to see bankruptcy made an option for states, especially involuntary bankruptcy, it doesn’t feel to me like something that will ever happen. According to the story, this was discussed on the heels of the 2008 recession. Yet when the Republicans had an opportunity in 2016, with a majority in both houses and in the White House…nothing. So why expect anything to happen now when there is a D majority in the House? [In that respect its similar to the calls to repeal and replace the ACA, which were easy to make with a D… Read more »
“Yet when the Republicans had an opportunity in 2016, with a majority in both houses and in the White House…nothing. ”
State bankruptcy in 2016 was too early to have the discussion. Even states like CA had budget surpluses (despite long term unpaid obligations).
These days, state bankruptcy is now on the tip of everyone’s tongue.
The funny thing is that no one would ever come to the table so it doesn’t really matter tha one has some sort of technical “bankruptcy for states” . If Illinois cared about that, they would have already taken measures to try to be more solvent. Newsflash, they don’t care. When Illinois literally can’t get money from the bond market, it will be a de facto bankruptcy. Some legal mumbo jumbo kangaroo court etc will stand in place of a technical “state bankruptcy” proceeding and whatever is able to be distributed, will be. The result will be the same, the… Read more »
I wouldn’t expect a greedy union boss to understand math any higher than what percent of the union dues receipts should he gift to his Democratic puppets.
But I looked it up and Jabba was educated at Duke and Northwestern so he does have a head on his shoulders. So if a totally impartial person with a degree in Actuarial Science told JB that the numbers don’t work, why wouldn’t he believe such a person?
To paraphrase a famous quote, “You can ignore reality, but you cannot avoid the consequences of ignoring reality.”
No one believes that the homely, prodigal son of a billionaire got accepted to Duke and NW law on merit alone. It was a good choice to admit him. He’s donated millions and sat some of their board of trustees.
Ocasio-Cortez majored in international relations and economics at Boston University – ever heard some of her proposals?
You have a point there.
Two things can happen… A bunch of states will line up and receive a bailout. Or a bunch of states will line up for bankruptcy.
Third option for Pritzker. Shut down services, scare the public even more to ramrod this Trojan Horse progressive tax and continue to ignore pension reform.
Pritzker was asked today at his daily press (lying) press conference if he would consider bankruptcy, and before the reporter could finish asking the question if flat out said NO. This man needs to go now, but of course with a democratic run state it will never happen. They all are probably giving each other high 5’s on the web. Useless pieces of you know what. And yes jabba was frazzled today and confused.
Never going to happen, McConnell is just blowing smoke up Pelosi’ s you know what to aggravate her even more.
What’s also never going to happen is Federal bailouts for states and municipalities. Pritzker wants to play God and shut the whole state economy down for some virus in Chicago, he can figure out the consequences.
He’s listening to the ‘experts’ who are no smarter than a box of rocks. The experts are all bleeding heart liberals who feel that even one dead is one dead too many and the rest of us, who are young, or older and not obese, should pay the price instead. This is truly redistribution of darwin’s survival of the fittest, shifting the risk from the fat, unhealthy and elderly onto the young, poor, and healthy.
This will be a lasting debate for years to come. We need to ensure Trump stays in office and the Senate stays red in order to avoid this state bailout debacle that would ensue. Even IL voters who would effectively get bailed out in this situation would be on the hook at the federal level so remember there is no free lunch people!
Elimination of Public Sector Unions must be item No 1 in Illinois Bankruptcy. Cut the head off of the snake.
this is huge and opens the door to ILs fix…pension bankruptcy is the only solution now, and we need land tax reform, income tax reform, and yes, term limits….the debt is simply to large to ever be paid back. continuing to raise taxes during this crisis, or during any time, will only feed the massive flight of IL citizens to other states. there is no other choice …..
The salient part, “The idea of allowing states to file for bankruptcy was raised in the wake of the last recession. It drew widespread disdain from Wall Street investors, public employee unions and both Republican and Democratic governors, who said it would unsettle the bond market and cause even the most fiscally sound states to face higher interest rates because of the risk the debt could be wiped out in court.” From what I’ve seen from most governors, it’s funny that this might be a 3-for-3 … when else do we see Wall Street investors and public employee unions supporting… Read more »
Bankruptcy for states came very close to becoming law in December 2017 — we have been told that by people who were very close to the process. What would really give it impetus is when a governor goes to Congress and says they must have it because they cannot pay debts. If not IL maybe NJ, CN or CA.
Not sure a blue state gov. will approach congress to ask for BK. That would be admitting to their voting base their pensions will be cut. Not renegotiated, but ordered reduced by a judge who confirms a reorganization. That’s a really, really tough political decision. SO much easier to legalize infanticide and celebrate by throwing your fists into the air. But cutting pensions, thereby causing the cascading personal bankruptcies of hundreds of thousands of howmuchamonth pensioner and union members, is not something blue state politicians can celebrate and dance a jig. Because it doesn’t involved the sacrifice of unborn children,… Read more »
Gov Murphy of NJ says “we will cut, cut, cut…we won’t go bankrupt…but we will leave our citizens in a lurch…alone on a beach helpless.”
Don’t think he understands bankruptcy.
https://burypensions.wordpress.com/2020/04/22/death-over-bankruptcy/
He needs to add the word wages after the word cut.
JB will tax your haircut (and all other services) before he’ll give the greedy teachers, fire, and police a pension haircut.
Which is really just a tax on small service businesses that are not structured to collect sales taxes. Compliance would be low and it would be very punitive as hundreds of thousands of small salons, lawyers, accountants, contractors, landscapers, trades, would suddenly become personally liable for unpaid taxes at whatever gross amount of sales the government says. I’d suddenly have a five figure tax bill every year that would be difficult to pass onto my clients. My salon isn’t going to suddenly charge me an extra 10%, most clients will tell them to just eat the cost. Is my landscaper… Read more »
“My salon isn’t going to suddenly charge me an extra 10%, most clients will tell them to just eat the cost. Is my landscaper going to break out the sales tax on my handwritten monthly invoice? This will be a complete disaster.” It’s one thing to think we should not tax services but it’s completely disingenuous to act like it can’t be done. Yes your salon will just add it to your bill. They already do it with any products you buy. Your landscaper will also add it to the invoice. Most states are already taxing many services so it’s… Read more »
“It’s one thing to think we should not tax services but it’s completely disingenuous to act like it can’t be done. ” It’s disingenuous to misquote my post. I didn’t say that it can’t be done. I said that it will be a complete disaster. I listed examples of small businesses that would struggle to collect sales taxes from their customers. Small businesses have a hard enough time paying their quarterly estimated taxes, it will become even more difficult when they have to make sales tax payments too. A lot of small businesses declare losses every year because they are… Read more »
Top damn bad for the states. They got themselves into this mess and they can get themselves out of this mess.
If it were up to me, I would give bailouts only of all past and present states politicians went to jail. But I will be kidnapped by a UFO before that happens.
“If the camel once gets his nose in the tent, his body will soon follow.” – ancient arabian proverb Seems to me that McConnell just forcibly put the camel’s nose into the tent. And there’s nothing conflicting about McConnell refusing to bail out state pensions and Nancy Antoinette’s statement that a state bailout will be in the next stimulus bill. The federal funds can be used to backstop and shore up declining state revenues while at the same time permitting the bankrupting of the pensions and underfunded long term obligations. IL’s constitutional ‘contracts clause’ and ‘anti-pension reduction clause’ mean jacks***… Read more »
It is THE SOLUTION, no doubt. See above.