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* The Center for Individual Freedom, which has spent millions on GOP congressional campaigns and fought campaign disclosure laws, is now blasting legislation to bail out Puerto Rico from its fiscal disaster.
But there’s a local twist. “If Puerto Rico is allowed to declare bankruptcy,” the group’s new TV ad warns, “high-spending states like Illinois will also want to declare bankruptcy. Retirement accounts crushed. A bailout on the backs of savers and seniors.”
posted by Rich Miller
Thursday, Apr 7, 16 @ 10:13 am
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Anyone else chuckle at “Super Chapter 9″ ?
Comment by ChicagoVinny Thursday, Apr 7, 16 @ 10:19 am
Well, Governor Rauner certainly has been a proponent of bankruptcy in both the private and public sectors.
I don’t think he’s advocated it for the state, though.
Besides, a bankruptcy judge would laugh you out of court if you tried to declare bankruptcy when you’ve just cut taxes.
There’s a difference between “can’t pay” and “don’t wanna pay.”
Comment by wordslinger Thursday, Apr 7, 16 @ 10:23 am
Some background on CFIF:
http://m.motherjones.com/politics/2012/04/karl-rove-crossroads-gps-center-individual-freedom
Comment by hisgirlfriday Thursday, Apr 7, 16 @ 10:27 am
==There’s a difference between “can’t pay” and “don’t wanna pay.” ==
I think you just coined the best new catch phrase for the Rauner administration Wordslinger. It sums it up perfectly, great job!
Comment by Gruntled University Employee Thursday, Apr 7, 16 @ 10:42 am
Big money conservatives fighting to prevent bankruptcy.
Here’s the other piece of the puzzle some people may not be aware of: the current negotiations on Puerto Rico debt have been focusing on posibly using bankruptcy to default on debt, primarily bonds, while keeping the government pensions whole or mostly whole. If that happens, then the rich lose money.
The 1.4%:
“We’re for bankruptcy when we can make money from it but we’re against it when we lose money from it.”
Comment by RNUG Thursday, Apr 7, 16 @ 11:07 am
–Here’s the other piece of the puzzle some people may not be aware of: the current negotiations on –Puerto Rico debt have been focusing on posibly using bankruptcy to default on debt, primarily bonds, while keeping the government pensions whole or mostly whole. If that happens, then the rich lose money.–
That’s how many muni bankruptcies have played out. I don’t think the union-busting bankruptcy proponents here have been paying attention.
Nobody made anyone buy PR bonds. And speculators could have sold them at any time. Pensioneers can’t take their labor back.
Comment by wordslinger Thursday, Apr 7, 16 @ 11:18 am
-word-
I knew you were on top of it.
And I agree, great “can’t / won’t” line.
Comment by RNUG Thursday, Apr 7, 16 @ 11:29 am
I don’t really care if bondholders or pensioners take the blow, the truth is there isn’t enough money to pay for all the crap Illinois and various municipalities have promised. BK is a very good solution.
Comment by Tone Thursday, Apr 7, 16 @ 11:35 am
“I don’t really care if bondholders or pensioners take the blow. . .”
From that statement, I assume that you are neither a bondholder nor a pensioner. We could raise taxes and start paying back what we owe.
Comment by Anonymous Thursday, Apr 7, 16 @ 11:49 am
There’s not enough money? Let us look at the economy of the state of Illinois gross domestic product of $746 B and a cost of doing business 1.5% below the national average. http://www.forbes.com/places/il/
Comment by NoGifts Thursday, Apr 7, 16 @ 11:55 am
- Anonymous -
-Tone- is a one note act. His answer to everything is “I can’t / won’t / don’t want to pay for anything government does.”
But every once in a while he comes up with a line that makes me laugh …
Comment by RNUG Thursday, Apr 7, 16 @ 12:22 pm
That’s actually not true. I have no problem with government providing police, fire, road, public transit, public education, etc. but it must be cost effective. And private taxpayers should not be second class citizens to coddled public employees.
Comment by Tone Thursday, Apr 7, 16 @ 12:42 pm
The country as a whole is at peak employment (breaking records each month now), our lousy state is still 70K+ jobs below our last peak. We will need another year of job growth at the current pathetic rate to just return to the previous high.
Comment by Tone Thursday, Apr 7, 16 @ 12:45 pm
=while keeping the government pensions whole or mostly whole=
That has been the trend but I think that’s due to self-serving judges. I don’t understand how the whole “equal protection under law” thing doesn’t apply in these cases.
Comment by Robert the 1st Thursday, Apr 7, 16 @ 12:50 pm
Territories are not states.
Those folks knew what they were buying when they bought those bond issues.
Comment by Anon Thursday, Apr 7, 16 @ 12:53 pm
People in Puerto Rico are fleeing to Florida, to avoid having to pay increased taxes, to pay back debt. What makes you think the situation in Illinois is going to be any different!
Comment by Anonymous Thursday, Apr 7, 16 @ 12:59 pm
Nobody forced anyone to buy bonds, but nobody forced anyone to take a government job.
I remember one college instructor told us that the financial health of any employers should be considered as much as salary and benefits.
Comment by Robert the 1st Thursday, Apr 7, 16 @ 1:03 pm
The irony is, that professor worked for an IL state university.
Comment by Robert the 1st Thursday, Apr 7, 16 @ 1:18 pm
==And private taxpayers should not be second class citizens to coddled public employees.==
Oh please. And I have no idea what a “private” taxpayer is and I suspect you have no idea either.
Comment by Demoralized Thursday, Apr 7, 16 @ 1:35 pm
What I mean by a private taxpayer is a taxpayer that works in the private sector, not a state public employee.
Comment by Tone Thursday, Apr 7, 16 @ 1:49 pm
We in the Illinois private sector are second class citizens to Illinois public workers apparently due to our abomination of a state constitution.
Comment by Tone Thursday, Apr 7, 16 @ 1:50 pm
==hat’s actually not true. I have no problem with government providing police, fire, road, public transit, public education, etc. but it must be cost effective. And private taxpayers should not be second class citizens to coddled public employees.===
Who gets to decide what is cost effective? Also I must have missed the memo that sitting in chair held together with duct tape, and using outdated equipment and not getting the perks of private industry made me “coddled”. I chose public service just like most of my cohorts and accepted a smaller salary than I would get in private industry, but I felt there was value in the work done. I also knew that for the years of work, and reduced salary I would be eligible for a pension, instead of a 401K. My friends in private industry laughed at the responsibility vs. the salary. That said they accepted that in lieu of a pension. It is time for people to accept the choices they made in their careers and stop ranting about what the other guy gets.
Comment by illinifan Thursday, Apr 7, 16 @ 1:52 pm
Oh for pete’s sake Tone enough of playing the constant victim. Were you wronged in some way at some point? Didn’t get a state job you applied for? I haven’t quite figured out your constant lamenting about how public employees have it so good and those in the private sector are eating bread and drinking water every day and apparently have no retirement or healthcare. Enough already. It’s getting old.
Comment by Demoralized Thursday, Apr 7, 16 @ 1:59 pm
==What I mean by a private taxpayer is a taxpayer that works in the private sector==
I wasn’t aware we had classes of taxpayers
Comment by Demoralized Thursday, Apr 7, 16 @ 2:00 pm
=but it must be cost effective.=
Government services like (especially) public education are cost effective. The Virginia Beach school district did a longitudinal study and found that public ed returns $2 in value for every $1 invested. Illinois student achievement data is better then Virginia.
A 100% return on investment is excellent by any historical standard.
Cost effective? YES.
Thanks for bring up the topic and providing the opportunity to crush yet another empty headed narrative.
Comment by JS Mill Thursday, Apr 7, 16 @ 2:12 pm
Yes, we have a protected class of public employees. And those of us in the private sector are servants to their benefits. It’s absolutely outrageous.
Comment by Tone Thursday, Apr 7, 16 @ 2:16 pm
Never once even thought of applying for a government job. Sorry.
Comment by Tone Thursday, Apr 7, 16 @ 2:16 pm
Education is obviously extremely important, too bad far too much money is going to pay for guaranteed public worker benefits in Illinois.
Comment by Tone Thursday, Apr 7, 16 @ 2:18 pm
== We in the Illinois private sector are second class citizens to Illinois public workers apparently due to our abomination of a state constitution.==
No, all the IL Constitution does is ensure the State, acting through the elected officals on behalf of the majority of the citizens, keeps the contracts and promises the State agreed to with it’s workers … who ALSO happen to be State citizens.
You don’t like some of the deals; we get that. But you don’t have 60 and 30, let alone the supermajority required in some cases, to change it. Even then, changing the Constitution also requires a majority of the citizens also agree to the changes. Last time they had a chance to call for a constitutional convention, the citizen’s voted against it.
You’ve got a ways to go to change that …
Comment by RNUG Thursday, Apr 7, 16 @ 2:21 pm
“Education is obviously extremely important, I just don’t want to pay educated people a real wage for it and I want it for free”
There you go…
Comment by JS Mill Thursday, Apr 7, 16 @ 2:33 pm
What? We in the private sector do not get taxpayer guaranteed benefits. Where do you people come from?
Comment by Tone Thursday, Apr 7, 16 @ 2:48 pm
Planning for an inevitable future is not a bad thing. This ad makes it sound like we should pretend Puerto Rico will stay solvent and doesn’t need bankruptcy proceedings. They do. Making a legal plan for how territories and other government entities go through and emerge from bankruptcy is where the details should be negotiated but to think no plan is needed is stupid. Puerto Rico will not be able to pay it’s bills come July, that is a fact. A legal process needs to be in place before then to figure out who gets paid what percent of money owed.
Comment by Maximus Thursday, Apr 7, 16 @ 2:53 pm
The ad doesn’t make sense. As if having no bankruptcy plan will somehow make Puerto Rico solvent? They wont be able to pay all of their bills come July, that is a fact. Having some form of bankruptcy plan in place is smart and makes it so the whole process doesn’t devolve into chaos and litigation.
Comment by Maximus Thursday, Apr 7, 16 @ 2:56 pm
Tone, I feel your pain. So do many of the working poor and middle class who are not public service workers. Many who respond to these posts feel it more important that the state honor its “constitutionally” protected benefit package than it is to support higher ed and social programs, but I get that. This world has always operated on the ’stick it to the poor’ mentality, and this current situation will not be resolved any differently.
Comment by blue dog dem Thursday, Apr 7, 16 @ 3:05 pm
Lovely. Another victim joins the conversation.
Comment by Demoralized Thursday, Apr 7, 16 @ 3:20 pm
blue dog dem, that is the truth. The people most harmed by all this are the middle class. That’s why 105,000 people fled Illinois last year.
Comment by Tone Thursday, Apr 7, 16 @ 3:24 pm
=That’s why 105,000 people fled Illinois last year.=
What was holding you back?
Comment by JS Mill Thursday, Apr 7, 16 @ 3:41 pm
“constitutionally” protected benefits
Why does constitutionally need quotes? Are you implying something?
BTW, we can honor our contracts and support education at the same time.
Comment by #5 Thursday, Apr 7, 16 @ 3:53 pm
If the State had properly funded the pensions for the 50 years prior to the 1970 Con Con, there would never have been a pension clause passed.
Comment by RNUG Thursday, Apr 7, 16 @ 3:54 pm
#5 - Thursday,
I believe the “constitutionally” part is in quotes because if there is no money for all the pay outs then the state will not be able to enforce it’s own constitutional law. Just like in Puerto rico, I believe their pensioners are protected by the constitution but in July there wont be enough money. They can talk about the payouts being protected but the money wont be there.
Comment by maximus Thursday, Apr 7, 16 @ 4:18 pm
#5 is alive, everything is possible on the backs of the working poor and middle class. The millionaires tax is back on the table. All outrage should be on its passage as well as equitable taxes on the Ag industry. Even the playing field and I support many expenditures. Until then, everyone should suffer.
RNUg,full pension funding sure would have darn near eliminated this crisis. But who is to blame for that?
You know my disdain for the RAUN Man, but MJM has sat on his hands for decades watching votes being bought and protected for decades.
Guys(gals) like me look at the Edgars of the world, knockng down huge pensions (COLA included) , double dipping at our flagship university and have to listen to him lecture people that we need to sit down and compromise. Everybody knows what that means. Stick it to the poor and middle class with the higher income tax rate.
Comment by blue dog dem Thursday, Apr 7, 16 @ 4:23 pm
FYI, while shopping at the local grocery store yesterday, I stood at the Oreos display in the center aisle and told as many people as I could that the dirty rottn bast….. shipped production out of country. I felt good!!!!
Comment by blue dog dem Thursday, Apr 7, 16 @ 4:27 pm
The public pension in Puerto Rico will be reduced, when it defaults on it’s debt!
Comment by Anonymous Thursday, Apr 7, 16 @ 4:28 pm
The whole Puerto Rico situation is going to make for some very strange political pairings:
In regards to Puerto Rico:
01 Democrats seem to want bankruptcy style ‘reorganization’ powers for ‘Commonwealth/Territories’, but apparently not for state governments.
02 Republicans seem not to want bankruptcy style ‘reorganization’ powers for ‘Commonwealth/Territories’, but apparently do for state governments.
03 The hedge funds and the ‘banksters’ are following their money (per usual), so they attach themselves like Remora fish to whoever protects their interests.
This is likely going to end up being the financial version of the whole pro-life/pro-choice debate. Only this ‘debate’ will be with some really big $$$$ numbers attached.
Btw, regarding this:
“Besides, a bankruptcy judge would laugh you out of court if you tried to declare bankruptcy when you’ve just cut taxes.
There’s a difference between “can’t pay” and “don’t wanna pay.””
—————
That’s nonsense. First off, IF whatever provisions for Puerto Rice are also applied to the State governments (which will likely be part of any compromise deal), the bankruptcy courts (or special masters, or whoever) won’t care about any of that political stuff.
What they will care about is an analysis (even multiple competing analysis from different interested parties) of each government submitted reorganization plan. But there’s no laughing anybody out of court. Not the way it works.
Will any legislative resolution to the Commonwealth of Puerto Rico likely end up also being applied to state governments? IMO, likely.
Going to be interesting…..
Comment by Anon Downstate Thursday, Apr 7, 16 @ 4:46 pm
Btw, the 04:46 PM post is “Judgment Day (On The Road)”, but apparently ‘name posting string’ only reads the name string up to a point and if it finds a duplicate up to the length of the string that it is reading, kills the post.
So I get to change my handle when I’m downstate. Not a biggie.
Oh well.
Comment by Anon Downstate Thursday, Apr 7, 16 @ 4:52 pm
@BDD “#5 is alive” I haven’t thought about that movie in a long time. Thanks! You just made me smile.
Comment by #5 Thursday, Apr 7, 16 @ 4:55 pm
-blue dog-
Part of my comment was that the pension funding ‘problem’ has existed in Illinois for over 100 years. Walker, et al to date,are just the latest players.
And if there is any ONE administration to blame for it, it is Dan Walker’s. His FY75 (I think) budget was the one that led to the subsequent IFT, etc. lawsuit that resulted in the 1975 IL SC decision that the GA could fund the pensions in any manner they chose to do so …
Comment by RNUG Thursday, Apr 7, 16 @ 5:19 pm
One of the things a bankruptcy judge looks at is the ability to repay. Illinois has the ability; they were handling all of it before at the 5% income tax rate.
As -wordslinger- said: There’s a difference between “can’t pay” and “don’t wanna pay.”
Rauner is trying to make it so bad Illinois can’t …
Comment by RNUG Thursday, Apr 7, 16 @ 5:24 pm
Tone and blue dog Dem, let’s be very clear about something, the pension debt is the reason we are in this mess but not because public employers are some “protected” class. For decades the GOP and the Democratic party have treated the pension systems like a credit card in order to keep taxes artificially low. You as taxpayers have benefited tremendously from that arrangement. If the State was not paying billions in pension debt now and if revenue was higher than the fiscal situation would look completely different and that has nothing to do with your rants against State employees.
Comment by MyTwoCents Thursday, Apr 7, 16 @ 5:32 pm
“One of the things a bankruptcy judge looks at is the ability to repay. Illinois has the ability; they were handling all of it before at the 5% income tax rate.”
———–
Respectfully, that’s partially correct. Normally the “ability to repay” aspects in a bankruptcy case normally have all sorts of conditions attached. The ‘fine print’, as it’s said.
And Puerto Rico (and potentially other interested parties going forward) are going to have lots & lots of the verrrry interesting conditions likely to be attached.
If your argument is just to raise taxes as the primary response in your reorganization plan, you might want to re-think that approach. Bankruptcy courts tend to try and avoid the ‘pushing the problems down the road’ approach, and if the ’status quo’ got you into the financial box in the first place, you might want to really re-think your approach to the bankruptcy court. Because all you look to be doing is to be ‘doubling down’.
And just citing a state supreme court decision to a federal bankruptcy court over state financial obligations that are now in front of a federal bankruptcy court as part of competing reorganization plans? Good luck with that approach.
Now, of course, that’s all hypothetical…. Today.
But things could change.
We’ll see.
Btw, background on the entire P.R. situation…..
Link is: http://brucekrasting.com/wall-street-rescue/
Just remember: “When they say it’s not about the money, it’s ALWAYS about the money….”
Oh, and here’s another (more current; like 04.06.2016) link:
http://www.zerohedge.com/news/2016-04-06/governor-puerto-rico-set-impose-capital-controls-preempt-bank-cash-run
Interesting reading, to say the least.
Comment by Anon Downstate Thursday, Apr 7, 16 @ 7:05 pm
Yo 2 pennies, I have no bones to pick with public servsnts. My bone of contention has, and always will be with the rotten politicos who made promises they could never keep.
Comment by blue dog dem Thursday, Apr 7, 16 @ 8:50 pm
My experience with the BK court is you take the “current” assets and liabilities, consider the priority and the “allocation” is made based on the date filling.
A major issue in Illinois has been noted many times. These unfunded pension has been unfunded for 50 years. Not only were they “rolled” into the future the amount has increased and all the parties stayed in office and “progressed”. The court could have issues here - did the pensions fund do enough to collect?
Comment by cannon649 Thursday, Apr 7, 16 @ 9:19 pm
== The court could have issues here - did the pensions fund do enough to collect? ==
The more relevant question might be: after the IL SC tossed the IFT case requesting specific funding commitments, was there any legal course of action left for the plaintiffs (State employees and retirees)? From subsequent cases and actions, it appears the only course available was political … and that didn’t work.
Comment by RNUG Thursday, Apr 7, 16 @ 10:08 pm
===What? We in the private sector do not get taxpayer guaranteed benefits. Where do you people come from?===
*cough* Medicare *cough* Social Security *cough*
Comment by GraduatedCollegeStudent Friday, Apr 8, 16 @ 9:57 am