Bad news for Newt Gingrich.He’s been the primary intellectual force for a bill that would allow state bankruptcies (a bill that we regard as hogwash).
Anyway, it doesn’t look like it’s going anywhere.
House Majority Leader Eric Cantor expressed his opposition to them this morning, even as he reiterated his opposition to state bailouts.
That means it’s almost certainly not going anywhere, let alone going to pass and be signed by the President.
The bottom line is: States already have a solution: spending cuts, tax hikes, and legal changes to renegotiate deals. There’s no reason to pull the rug out form bondholders to help them restructure.