(Not-so) Secret GOP plan: Push states to declare bankruptcy and smash unions

[Hannah Bell]

Congressional Republicans appear to be quietly but methodically executing a plan that would

a) avoid a federal bailout of spendthrift states and

b) cripple public employee unions by pushing cash-strapped states such as California and Illinois to declare bankruptcy.

This may be the biggest political battle in Washington, my Capitol Hill sources tell me, of 2011.

That’s why the most intriguing aspect of President Barack Obama’s tax deal with Republicans is what the compromise fails to include — a provision to continue the Build America Bonds program. BABs now account for more than 20 percent of new debt sold by states and local governments thanks to a federal rebate equal to 35 percent of interest costs on the bonds. The subsidy program ends on Dec. 31.

And my Reuters colleagues report that a GOP congressional aide said Republicans “have a very firm line on BABS — we are not going to allow them to be included.”

In short, the lack of a BAB program would make it harder for states to borrow to cover a $140 billion budgetary shortfall next year, as estimated by the Center for Budget and Policy Priorities. The long-term numbers are even scarier. Estimates of states’ unfunded liabilities to pay for retiree benefits range from $750 billion to more than $3 trillion.

http://blogs.reuters.com/james-pethokoukis/2010/12/07/secret-gop-plan-push-states-to-declare-bankruptcy-and-smash-unions/

[Goldstein1984]

1. Disaster Capitalism

Cut taxes
Deregulate
Privatize
Cut social services
Force changes on a people who are disoriented, frightened and desperate.

Read: "The Shock Doctrine" by Naomi Klein.

[myrna minx]

2. Shock Doctrine is progressing smoothly. n/t

[laughingliberal]

3. K & R nt

[newblewtoo]

4. This has been the plan all along

Newttie made no secret of it, he telegraphed the move with his "Wither on the vine" comment. Just because you don't see action from the pricks doesn't mean they have changed their objective or gone away.

Good post too bad more people don't appreciate the gravity of this now. It will be too late sooner than we think. There are plenty of distractions at the moment to provide cover, later people will shake their heads and go when did this happen.

[ck4829]

5. K&R