Kirk: Let Illinois Go Bankrupt

By Prescott Carlson in News on Jan 22, 2011 5:00PM

U.S. Senator Mark Kirk has joined the Republican call to let states like Illinois go bankrupt to help restructure their debt and right their financial ships (so much for the GOP being the champions of state sovereignty).

According to WBBM 780, Kirk prefers the bankruptcy option over the federal government shelling out big bucks:

"Between a bailout, which has no possibility of passing in the House, and a default, which means suddenly, the state treasury runs out of money to pay for anything, is there something that allows a state to work out its debt situation?"

The answer to Kirk and other legislators is to let those states pull a General Motors and declare bankruptcy with federal help. The New York Times reports that some members of Congress are "quietly" looking at the issue and what it would take to surmount a constitutional challenge "with nudging from bankruptcy lawyers and former House speaker, Newt Gingrich." The report added that another option besides "full-blown bankruptcy" would be to "establish instead some sort of oversight panel for distressed states."

The move is seen by some as Republicans taking advantage of certain states' financial woes to blow up public sector unions and cut government funded pensions.