Bankruptcy for States? BAD!

Bankruptcy to escape their debt load? Not such a good idea, these letter writers suggest…

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David Skeel’s one-size-fits-all bankruptcy option for states (“A Bankruptcy Law—Not Bailouts—for the States,” op-ed, Jan. 18) presupposes that all state pension funds are in the same financial sinkhole. Nothing could be further from the truth.

While many states have failed to meet their pension obligations, New York has not. The pension systems in states like Illinois (50.6% funding ratio) and New Jersey (62%) have fallen far below acceptable levels because those states have repeatedly failed to pay their required annual pension fund contributions. This year alone, New Jersey skipped a $3 billion payment. Payments delayed cost taxpayers more. That’s why the New York State and Local Retirement System has consistently been at or near a 100% funding ratio. We pay our bills.

Even for states in fiscal crisis like Illinois and New Jersey, proposing bankruptcy as a financial panacea is an irresponsible tactic with severe negative implications. Just the availability of a bankruptcy option and the potential bond default could severely damage state credit ratings and destroy the trust of bondholders. Our economy cannot withstand another crisis in confidence.

Bankruptcy may be presented as a painless way for states to walk away from bad fiscal management, but easy solutions are rarely the best solutions to very difficult problems. The best way for states to address their fiscal difficulties is to align recurring spending and revenue, not renege on obligations.

Thomas P. DiNapoli  –  State Comptroller, Albany, N.Y.

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The moral hazard in Mr. Skeel’s argument is immense. Please recall that all state and municipal bondholders are not unions or the super-wealthy. Many individuals of modest means hold state and municipal bonds. Evidently it is perfectly acceptable for these individuals to take a substantial haircut and bear the cost of state and municipal debt restructuring.

Pension fund and other state “obligations” are exactly that, obligations, on which many rely for retirement. These obligations should not be dealt with by simply wiping out those who, in good faith and with expectation of only a modest return, financed these obligations in the first place.

Stephen Clark  – Bellevue, Wash.

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Why bother with bankruptcy proceedings? Just kick insolvent states out of the Union. A state would return to territorial status, thereby dissolving its government along with all of its contracts, agreements and financial obligations. The federal government would then appoint a territorial governor, disband the legislature and take over the state courts and government agencies. The entire congressional delegation would go home.

Once the citizens of the territory write a constitution with sufficient safeguards to convince Congress that this would never happen again, it could then rejoin the Union. Prof. Skeel should devote his efforts to determining what events might trigger the scenario described above and how our government should prepare for it. He should hurry. It’s probably closer than we realize.

Terry M. Bourne –  Aromas, Calif.

via Letters to the Editor: Even Talk of Bankruptcy Is a Bad Solution for States – WSJ.com.

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Rising Above Roe v Wade

Hard to imagine anyone having an issue with this writer…

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Are babies better than abortions?

That’s not a question we are accustomed to hearing. For the most part, abortion—America’s most divisive issue—plays out as a question of competing rights. So it will be this weekend as pro-life and pro-choice legions each mark the 38th anniversary of the Supreme Court’s landmark Roe v. Wade decision on abortion.

Yet a simple figure released earlier this month by the Chiaroscuro Foundation, a private nonprofit organization, provokes a different question. After crunching the latest statistics from New York City’s Health Department, the foundation reported that 41% of pregnancies (excluding miscarriage) in New York ended in abortion. That’s double the national rate.

So again the question: As a society, does this figure say anything about the choice between a baby and abortion? Even for those who believe the choice for an abortion belongs to a woman alone and ought to be unfettered by city, state or federal law, is there any ratio such a person would say is too high?

The question becomes even more compelling when broken down by race. For Hispanics, the abortion rate was 41.3%—i.e., more than double the rate for whites. For African-Americans the numbers are still more grim: For every 1,000 African-American live births in New York, there were 1,489 abortions.

These numbers can make Roe seem very distant. Years ago, Bill Clinton famously summed up the pro-choice argument as “safe, legal, and rare.” What can the qualifier “rare” mean, however, unless it means that in some fundamental sense, a baby is better than an abortion?

Some, of course, will argue that what they mean is that America ought to devote more resources to helping women prevent getting pregnant in the first place. Whether or not that’s as easily done as said, a focus on not getting pregnant does nothing for the woman who is pregnant and finds herself with a hard choice.

So how is New York responding? Earlier this month, the Chiaroscuro Foundation put together a high-profile press conference that brought the archbishop of New York and the leader of the one of Orthodox Jewry’s most distinguished organizations (Agudath Israel of America) together with the African-American pastor of a large, Harlem church and a Latina who serves as a spokeswoman for Democrats for Life. As the New York Sun pointed out, notwithstanding all this ecumenical focus on New York’s distinction as America’s abortion capital, it elicited nary a peep from the mayor.

Meanwhile, the speaker of the City Council, Christine Quinn, is pushing a bill designed to make it harder for people who are trying to help women keep their babies. Bill 371 targets Crisis Pregnancy Centers, and would require them, among other things, to advertise on site that they do not perform abortions or provide abortion referrals. It tells us something that there appears to be no interest in requiring that, say, Planned Parenthood post in their clinics some telling information of their own: 324,008 abortions nationwide against only 2,405 adoption referrals in 2008, the most recent year for which it reports statistics.

Rather than rehash the allegations against Crisis Pregnancy Centers—e.g., that they often disguise themselves as medical clinics, that they are not upfront about whether they offer abortion—let’s stipulate for the sake of argument that they are all true. In the end, a woman who wants an abortion can still walk out and get one, as many do. A woman who doesn’t necessarily want an abortion, however, can find all kinds of help: a place to live if her family or boyfriend has kicked her out; training for mother care; and, not least, the friendly face of a caring volunteer.

No doubt there are mothers who regret having their children. Occasionally you even read of one suing a doctor for not alerting her to a disability in her child that would have led her to abort if she had known. Far more common, however, are the websites with women repeating this heart-rending lament: “If only one person had encouraged me to keep my baby . . .”

On the moral claims and counterclaims on abortion, we have a vast chasm. Yet the moral divide can blind us to the possibilities that exist in all human communities. Might that start with recognizing that a 41% abortion rate means that many pregnant women are not getting the social help and encouragement they need to have their babies?

We all know people whose absolutism on a woman’s legal right to choose does not prevent them from celebrating and supporting a pregnant woman within their midst who announces she is going to have a baby. So put aside Roe for a minute. And ask yourself this: What kind of America might we have if all pregnant women—especially black and Hispanic women who are disproportionately aborting—could feel from society that same welcome and encouragement?

Would it be too much to say “better”?

via McGurn: Rising Above – WSJ.com.

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Governors vs. ObamaCare

By STEPHEN MOORE

Republicans in the House aren’t the only ones in favor of repealing ObamaCare. So are many of the nation’s governors, who complain that the law drills big holes in state budgets.

In a Jan. 7 letter to President Obama, more than 30 current and former GOP governors urged the White House to remove “excessive constraints placed on us by healthcare-related federal mandates.” The letter says that ObamaCare and spending mandates from the stimulus bill passed in 2009 “prevent states from managing their Medicaid programs for their unique Medicaid populations.”

ObamaCare’s mandated spending comes at a time when states “will face unprecedented budget challenges,” write the governors, and the biggest problem is Medicaid because “enrollment is up [and] revenues are down.”

One of the strongest advocates of replacing ObamaCare is Texas Gov. Rick Perry, who says that the new law and other mandates will “cost Texas $9 billion in new expenses at a time when our budget is already tight.” Without reforms in Medicaid rules, he predicts that Texas will be required to cut the rates paid to hospitals and doctors by 48%.

According to the governors, ObamaCare’s cost to states will be significantly greater than the Congressional Budget Office’s $20 billion estimate over 10 years. Indiana alone estimates that the bill will cost the Hoosier state between $2.6 billion and $3.1 billion. Pennsylvania says ObamaCare could add 800,000 new enrollees to its Medicaid bills.

ObamaCare supporters counter that these extra costs are paid for entirely by the federal government in the first year of the law’s implementation, and after that the feds pick up 90% of the tab. But Ed Haislmaier, a health-care expert at the Heritage Foundation, has reported that this doesn’t account for “billions of dollars of new administrative costs to states and for the fact that the individual mandate for ObamaCare will add potentially millions of patients to the Medicaid rolls” who otherwise would not have qualified. “This law could cost the states easily twice as much as anticipated,” he said. “It’s going to make Medicaid’s financial problems even worse for states.”

via Governors vs. ObamaCare – WSJ.com.

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I'm serious… usually. (Martin Rossol)