If Illinois Democrats planned on getting a bailout from Congress to get the state out of the financial mess it's in, well, they were mistaken. Like adult kids in a family, most are fiscally responsible and frugal, but there's always one that blows everything he or she gets and then expects Mom and Dad to get him or her out of trouble. That spoiled child just doesn't seem to notice that when his parents write a check, the other kids in the family are shortchanged their share of the family treasures.
If that's what Illinois was thinking, the new Republican chairman of the House Ways and Means Committee U.S. Rep Paul Ryan of Wisconsin has news. The expected federal funding feed line is being cut off. No bailouts for Illinois or California or any other state that's in trouble.
“Should taxpayers in frugal states be bailing out taxpayers in profligate states?” Ryan asked during a forum near the Capitol. “Should taxpayers in Indiana, who have paid their bills on time, who have done their job fiscally, be bailing out Californians, who haven’t? No, that’s a moral hazard we are not interested in creating.”
Illinois and California are on their own, a New York=based senior bank analyst told Bloomberg.com :
“We expect state and local governments to wrestle with their fiscal problems on their own without help from the federal government,” said Natalie Cohen, a New York-based senior analyst for the bank, in a report. She said 35 states haven’t reported midyear deficits, while Illinois’s $13 billion gap is 47 percent of its budget. In California, she said, the current- year imbalance amounts to 6.6 percent of the spending plan.
Moody’s Investors Service said yesterday in a report that this year won’t bring any defaults on state debt it rated. There were no defaults last year involving state and local securities it rated, the New York-based company said.
That must be discouraging news for Illinois Democrats, who were working under the assumptions the feds would bail our bankrupt budget out like they did GM and Chrysler.
