Your morning jolt: Let states declare bankruptcy, says Newt Gingrich

Say you’re the governor of a large Southern state and the pensions that you and your predecessors have promised are killing the bottom line.

Bankruptcy for states should be an option, says former U.S. House speaker and possible 2012 presidential candidate Newt Gingrich.

Former U.S. House speaker Newt Gingrich

Former U.S. House speaker Newt Gingrich

In an article published in Pension and Investments, a spokesman recently confirmed that Gingrich is working “inside and outside of Congress” for federal legislation that would give troubled states the right to declare themselves financially insolvent – and renege on pension and other benefits.

Writes P&I:

Proponents of the measure — which include Americans for Tax Reform, a Washington lobby group that fights tax increases — said the legislation is desperately needed to clear the way for struggling states to slash costs before they go belly up, and should be regarded as a preemptive move that could preclude the need for massive federal bailouts.

“It’s in the short-term and long-term interests of government workers and taxpayers to start those reforms now, rather than having to pick up the pieces after a crash landing,” ATR President Grover Norquist said in an interview.

***
Gov. Nathan Deal has quickly gotten religion when it comes to the weather. From AccessNorthGa.com:

Deal said Sunday while in Gainesville for a church service for him and first lady Sandra Deal [that] he would meet with the state DOT board this week to look for options….

“Hopefully we can learn some things,” he added. “I think one of the things we can learn is that we can have contractors on stand-by that we could call during these very difficult and unexpected situations and hopefully that would be one of the outcomes.”

***
Sonny Perdue has been gone just over a week. And already the former governor has lost control of the facts.

As he walked out the door, Perdue granted a half-dozen exit interviews to defend his eight-year legacy. Education was a major sore point.

Said Perdue in an interview with Denis O’Hayer of WABE (90.1 FM):

”I think we’ve had a huge transformation go on in education. Graduation rates, for one thing. Around 63 percent when we came in eight years ago. Over 80 percent now. Those are huge numbers to change.”

But in an overlooked (i.e., written during the Ice Jam) post by my AJC colleague Maureen Downey, Fran Millar of Dunwoody, the Republican chairman of the Senate education committee, admitted that Perdue’s graduation rates have been pumped up:

“Do I believe we have overstated the graduation rate in this state? Absolutely,” he said. “But I do think the important thing is that we made progress in this state.”

However, when the new methodology is used, Millar says, “There is no doubt in my mind that the rate is going down. I hope it is 10 points less. If it goes down beyond 10 points, many of us will be very, very disappointed.”

To add insult to injury, the New York Times this morning takes a look at the fishing museum in Perry, Ga., that Governor Perdue pushed through in 2007:

“Hindsight is 20/20, but we should have seen this one coming,” said State Senator George Hooks, an Americus Democrat on the budget-writing Appropriations Committee.

With a large state deficit looming, Go Fish has become a cautionary tale about the long-term ramifications of prerecession decisions. The state must make [$1.6 million] bond payments for the museum for the next 16 years. Meanwhile, cuts are being proposed to the state’s college scholarship program, health care and the prison system.

“We simply can’t afford it — not in this economy,” said Debbie Dooley, the Georgia coordinator for the Tea Party Patriots, who likened the museum to Alaska’s infamous “Bridge to Nowhere.” “When you want to talk about wasteful spending in Georgia, the first thing everyone brings up is Go Fish.”

***
As part of its MLK holiday coverage, ABC News on Monday took a 50-year look at the integration of the University of Georgia. Good vintage video of a not-so-pretty time in state history:

***
So far as we know, no members of Congress reported anything untoward during their weekend sessions with constituents – other than a surplus of high-flown dialogue. From the Associated Press:

U.S. Rep. John Barrow, D-Ga., answers questions from an overflow crowd that came to his office Saturday. AP/Savannah Morning News/Carl Elmore

U.S. Rep. John Barrow, D-Ga., answers questions from an overflow crowd that came to his office Saturday. AP/Savannah Morning News/Carl Elmore

At a [Saturday] morning event at Barrow’s district office in Savannah, four police cruisers sat outside and two federal Homeland Security officers monitored the hallway as some 50 constituents packed in to listen, ask questions or seek the congressman’s help navigating the federal bureaucracy.

“There are normally about a dozen people at these,” Barrow said as his staff scrambled to accommodate the crowd.

Jeanne Seaver, a Savannah tea party leader who had sought the Republican nomination to challenge Barrow last year, attended as show of support following the bloodshed in Tucson the weekend before.

“We are very concerned for your safety,” Seaver told the congressman. “Thank you for being brave and coming out and meeting with us.”

Barrow demurred, saying he doesn’t believe he or other members of Congress are under any increased threat.

The shooting in Arizona, he said, was carried out by a single mentally disturbed individual and was not inspired by political ideology or partisan vitriol.

“I’m not at all concerned about this and you shouldn’t be,” he said.

- By Jim Galloway, Political Insider

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127 comments Add your comment

khc

January 18th, 2011
9:41 am

bankruptcy for states…..i agree with newt…no pensions for legislators or judges……they want to balance on back of state/teacher employees who were paid below market during the good years in return for good pensions….

ga has already taken steps to control pension costs, which genrally translates into fewer dollars for retirees…..while newts at it lets whole country renege on all pensions, his included…..fat ba$tard….under last democratic governor states pensions were 100% funded or darn close to it.

but take sandy springs for instance, a repub stronghold, where apparently no bid contract for legal counsel is ok….

don’t you just love repubs…favor the rich and the heck with the rest of you

we are doomed

January 18th, 2011
9:47 am

I am all for states filing bankruptcy. Politicians of the past promised pensions we cannot afford. Unions have ruined companies with these ‘paid for life’ plans and they need to stop before all of us are bankrupt.

khc

January 18th, 2011
9:51 am

ok let’s declare all your retirement savings null and void too

Cutty

January 18th, 2011
9:56 am

We are doomed, you and Newt are arses. For one thing, GA and most southern states don’t have unions so how else would u explain the deficits. Secondly, it shows what a true fiscal conservative Newt is by dodging contractual obligations. I’m in with restructuring benefits for new hires, but current employees should get what they signed up for. You have a problem w that you can Go Fish. Another republican boondoggle.

khc

January 18th, 2011
10:01 am

good points…let’s go after wall st, switzerland bank tax havens, banks, utility companies, the health care insurance industry, the bloated military industrial complex….they are the ones bilking americans even as we speak

Port in a Storm

January 18th, 2011
10:01 am

I highly disagree with Gingrich. Allowing states to declare bankruptcy would only give a free pass to politicians who refuse to rein in their own spending. Pensions aren’t the problem; it’s the legislators.

CountMeIn

January 18th, 2011
10:01 am

I agree. Vast majority of judges, high level execs, as well as the legislators have in no way earned the types of pensions they are receiving. If the unwashed masses are going to take a hit, the hit to those in government should be harder and much more damaging. After all, they’ve caused a bulk of the financial problems the states are dealing with.

pn

January 18th, 2011
10:03 am

Gingrich is all about the destruction of government and the social contract. There are no commitments or principles that cannot be ignored in the name of expediency. It’s every man for himself in Gingrich’s world view, until anarchy prevails.

Road Scholar

January 18th, 2011
10:03 am

Newt is already morally bankrupt!

Mark

January 18th, 2011
10:07 am

Okay I am for getting rid of pensions of judges, lawyers and state senators and house people. As for the rest of the state employees who worked for to little for far to long their pensions are and should be safe. Look at Gwinnett county in reference to corruption in government. And yes the courts and judges had to approve zoning in some of these cases. Commissioner resigns to avoid indictment and commission kenerly is indicted. Buying land 7 million in bad economy and selling to county for 12 million and getting payouts to do it. Until corruption is cleaned with judges, politicians,lawyers and banks nothing is going to get better for the people who actually do the majority of the work.

Keep doing this GOP

January 18th, 2011
10:09 am

Yeah, lets stick to the government employees. What in the heck are contractual obligations anyway?. But i bet your bottom dollar ole Newt is gonna protect his pension not only from the state but from the federal government as well.

Why do people continue to listen to him?

Bob Johnson

January 18th, 2011
10:11 am

I’d like to fund my own retirement.

Can I just have back all of the money I’ve paid into government retirement programs and go it on my own?

khc

January 18th, 2011
10:12 am

i don’t know, looks like newt has stored enough fat for a long winter

BO

January 18th, 2011
10:14 am

Newt is an extreme politician that is still trying to be relevant in today’s political climate. He is willing to say and do anything to get the peoples attention not matter how outrageous and insane his comments may be. It is time for him to give up his Presidential aspirations and find a quiet corner somewhere in COBB county and hide. The American people will never find Newt an electable candidate for that office primarily to his own personal failings. He is hoping that “YOU” the American people have forgotten and will forgive the handling of his personal relationships. We have “NOT” nor will we ever forget!
Newt is Not the kind of MAN that can be trusted with the highest office of the LAND! His politics are TOO EXTREME and his proven past ACTIONS are too UNPREDICTABLE for the responsibility that comes with the OVAL OFFICE. Many will not say it, I just DID!

Snickers409

January 18th, 2011
10:14 am

Newt Gingrich is a two faced, womanizing, scumbag who would cast his own mother out into the cold if it proved beneficial to his fat self. If there was any justice in this world that fat headed fob would still be serving time in prison for all the crooked deals he was involved with during his vile political career. There’s a reason he had to flee the state of Georgia you know. He snuck out when things were obviously getting too tough for him here and the day he left the air became considerably cleaner. The stench of his underhanded dealings was noxious.

To hell with what Gingrich wants. Anyone who would even entertain any ideas from this fool should be locked up with him.

Will

January 18th, 2011
10:18 am

It is so easy for politicians like Gingrich to make statements such as those referenced in this post.

People like Gingrich have no responsibility and are protected from being held accountable to such nonsense because politicians like Gingrich sit on the sidelines rather than govern.

What’s that you so, Gingrich is going to jump into the fight by running for president?

Oh please…….politicians like Gingrich always “toe the line” with grand pronouncement but do so only to pump up their books sales and speaking fees. I only wish Gingrich would follow and actually put down the money and run for president. This would divert millions of republican dollars down a black hole of defeat and would also give Gingrich a true measuring stick of how important he is outside of his narrow base of republican support. Gingrich, Palin, Cain, that hair brain member of Congress from Minnesota, Pence, Jindal and any southern secessionist republican. Please, please, please jump in to the fray – run for president. I pray one of you can win the republican nomination, thus ensuring the re-election of our President.

kenny

January 18th, 2011
10:18 am

the government says spend to get us out of these problems, were the saying save when the times were good? NO. The only thing they do is collect your money in a so called tax system it has been said many times that government could not operate like a privet businesses they wast and don’t think twice. this is true. i think it would save trillions if all local governments shut down forever.
go newt.

govemployee

January 18th, 2011
10:18 am

Seriously? Once again government employees want to be exempt from any long term recession fallout. The gov is so grossly overstaffed and wasteful it’s sickening. And most gov employees couldn’t hold a job cutting grass in the private sector. Too much work! How about this gov employees, save your money for retirement instead of taking mine. I have to save for myself and pay your lousy pension too! Many of us in the private sector has seen our pensions wiped out years ago, so join the club you overpaid crybabies!

bill

January 18th, 2011
10:19 am

Most retired educators will agree that Zell Miller helped increase teacher salaries, which in turn helped increase teacher pensions. So is Newt throwing down on Zell Miller? Zig Zag Zell, wherever you are, please stand up and let our state politicans know how disappointed you are in them. The past and current politicans are ruining everything you worked hard for.

bart

January 18th, 2011
10:19 am

Newt is an immoral, idiot and Sonny is a corrupt, incompetent crook.

khc

January 18th, 2011
10:21 am

remember the recent scam where newt’s organization would reward you with some prize for a sizable contribution and one of the companies newt rewarded was a gentlemen’s club….what an arse

Will Jones - Atlanta Jeffersonian Exegesis

January 18th, 2011
10:26 am

Coincidently, thouvh a whitetrash serial adulterating pervert and Vietnam draft-dodger brouvht to us.by a DuPont heir, now slowing his true colors as a wouldbe leader of the Roman Anti-Christ’s American Fifth Colomn, Neutie is right about letting go twist in the winds the redst of us are sailing in and forget the pension security they would have earned predicated on righteous service onbelf of the sovereign People – rather than sinecures of fascist plutocracy’s buffer caste failing to prosecute, and even running interference for the false elie traitors who are draining our economy having committed 9/11 to send us to false war to further enrich themselves and reduce us.

ji

January 18th, 2011
10:27 am

The problem is SCHOOL EXPENSES. Principals in metro atlanta making $225,000 a year and teachers with a ‘masters’ making $95,000 a year. WAKE up that is where all the tax dollars are going

Uptown

January 18th, 2011
10:31 am

Folks,
No one would vote to lower their retirement benefits. But if there is not enough money to pay full benefits then a restructuring is the only solution. Bankrupcy is inevitable-sooner the better.
Calling Newt a fat man is also a good solution.

Honestjohn

January 18th, 2011
10:35 am

I agree with Newt! Most of the southern states have been financially responsible and are most likely not going to need bankruptcy protection. The real problem is with states like Illinois, Michigan, and California which for years have gone crazy with offering everyboby a handout at the expense of the next generation. Well, the next generation is here and they don’t want to pay for the sins of their fathers and grandfathers. If you want liberals running your government then you must pay. Otherwise live within your means. By the way, you Liberals in these states please stay there and fix your own problems. Don’t bring your liberal ideas to the south and ruin us the way you have ruined your own states.

kris

January 18th, 2011
10:37 am

govt is too big and needs to be gutted. too much waste. i agree with him.

khc

January 18th, 2011
10:37 am

maybe some restructuring in order, but how bout passing bills that protect or promote job growth instead of outsourcing jobs overseas…thanks to reagan for starting our country on a debt spiral, clinton for nafta, and w for turning blind eye to greed on wall st, and thanks dems for wanting to give it away when we don’t have it…..

itpdude

January 18th, 2011
10:46 am

Ha ha ha, there are old people who depend on these pensions but Gingrich wants everything they worked for to be wiped away leaving, I guess, the children to help their parents out.

Also, the pensions are often the only thing that gets people in govt service. If you want more incompetent people in govt, get rid of the pensions.

RGB

January 18th, 2011
10:46 am

You folks tickle me. Taking shots at Newt, his weight, his personal habits. But not a solution among the thousands of words written.

Democrat Governor Cuomo (NY) is proposing salary cuts for state employees. Is he fat? A Womanizer? A Republican? Aren’t pay reductions shirking one’s “contractual obligations”? Let’s get ‘em boys!

What should a state do when it can’t pay its obligations? Raise taxes? What happens when raising tax rates produces less revenue for the state? Raise taxes again? That’s your only answer.

Newt (and others) have proposed alternate solutions that include bankruptcy as a means for states to void certain commitments–especially for those states that do have organized state employees.

If a state doesn’t have the money to pay its debts (and must have a balanced budget as required by their constitution), it only has a couple of options. The idea of a state declaring bankruptcy isn’t new to Newt. He’s just popularizing it as an option for states that presently have few.

Besides repeatedly raising taxes, do you nattering Newt naysayers have anything to offer besides negativism?

Do tell.

Robert Zeweki

January 18th, 2011
10:53 am

It’s very clear here that the Federal Government does not want to help pay for the mess. That they created by lax supervision of entities like Fannie Mae and the like. How the states can be blamed for what was clearly their responsibilty is beyond understanding to me. Letting bk happen may seem like a give me. Or kindness.

However I beleive this is more or less telling the states. This is way more than we can handle. In the good times your revenue was appreciated. It all worked fine. Now that the bad times have manifested. Your on your own.

Robert

January 18th, 2011
10:54 am

Spot on……..KHC and pn. Politicians can give up their pensions to balance the budget.

Answers?

January 18th, 2011
10:54 am

Let Newt go bankrupt. What’s his job anyway? Has he ever really had one? Hasn’t he always lived on taxes? Has he ever actually worked a day in his disgusting life?

History Will Teach Us if we Learn

January 18th, 2011
10:56 am

Most all people that work for someone else or a company do not setup or operate the pension plans of their employer. Gov’t workers are no different, they accepted the pension plan their particular govt enity provided when they accepted the job with that govt’agency. They generally made manditory contributions to plans,and so to blame them for pension plan problems is not right. To me its akin to a restaurant offering an all you can eat buffet and then complaining after you paid that you ate too much!

BG

January 18th, 2011
10:56 am

Desperate politicians seek desperate measures.
God help us… It’s worse than we think.

Thuga

January 18th, 2011
10:56 am

I love the personal attacks as a basis for disagreeing with comments. Personal attacks are what drives those who have not spent any time to breakdown the issues at hand. Many people do not understand the financial dynamics that are in play here. The result of inaction will lead to financial disaster in the future. Let’s try to have a discussion about where we are and proper corrective action for the future. Lack of action will result in our children and grandchildren being saddled with enormous taxes and obligations.

Enough with the trash talk!

Boycott Chinese made goods!

Peace Out!

khc

January 18th, 2011
10:57 am

Gerry S.

January 18th, 2011
11:00 am

Of course, Newt & Norquist would be first in line to protest allowing homeowners to restructure their underwater mortgages in bankruptcy. The Republican Party remains what it has been since the days uf US Grant (except for a brief excursion into Progressivism under Teddy Roosevelt) the party of the very wealthy and of big business. They have, however, been successful in luring citizens to vote against their financial interests by shifting the blame for our ills onto different minorities — it used to be the blacks but now it’s the Hispanics; it used to be domestic communists, but now it’s homosexuals. Newt Gingrich is a morally bankrupt individual, and the fact that he can be considered as a serious Republican spokesman, let alone candidate, tells you what you need to know about that Party.

Thuga

January 18th, 2011
11:02 am

Gerry S.

Prove it! Back up anything you just posted. I dare you!

chuck padden

January 18th, 2011
11:08 am

Thinking about Sonny Perdue made me realize that he was never embraced by the GOP in Georgia. Anyone notice that there was no big going-away shindig for him? After 8 years, you would think there would have been a tribute event for him, but no one liked him enough to put one on. Everyone was just glad to be rid of him.

Maddog

January 18th, 2011
11:08 am

Is Speaker Gingrich the recipient of any pension for his service in the House? Is he receiving any pension for his years at West Georgia College? Does he receive Social Security? Does he have a 401 K with taxpayer match? If the answer to any of the above questions is yes, then I will listen to him when he renounces the payments he is receiving from the taxpayers and proves he has returned all the money.

A. S. Mathew

January 18th, 2011
11:09 am

Are we going to face the same fate and tragedy of the former U.S.S.R? All the States,
cities and counties are in a financial crisis. The homeowners are now fighting for reduced
taxes on their property, so the main income of the cities and counties are in serious jeopardy.

If events are shaping in this direction, the march of bankruptcies have to jump into the city and
State level without further delay.

gadawgs

January 18th, 2011
11:10 am

Ji..You may need to wake up because school expenes are not the issue. Educators as a whole are not compensated enough as it is. I know alot of principals and not one of them make $225,000 per. I also know alot of teachers with their Masters and Specialists Degrees that make nowhere near $95,000 per. There is alot of fat that needs trimming but it is not in education.

al stash

January 18th, 2011
11:10 am

as long as I have known Newt he has been morrally bankrupt & I have known since the days when he was a professor at West Ga.college.Trust me he was really a disgusting person.

gadawgs

January 18th, 2011
11:12 am

Also, Newt is a crook and morally BANKRUPT and ONLY cares only about Newt.

globeflyer

January 18th, 2011
11:13 am

Letting States “go under” in not unprecedented. It happened back in the 1800’s when, in their (unusual) wisdom, the Feds told the states “NO!”. It WILL discourage overspending in the future because it will be harder for the states to borrow money. Living within your means…..a novel concept. We have gotta get out of this “entitlement” mentality. It will be the end of this nation if we don’t…..

gadawgs

January 18th, 2011
11:13 am

al stash..you took the words right out of my mouth!

You Can Tell By The Smell

January 18th, 2011
11:14 am

Let the states go bankrupt? Newt…you apparently don’t give a tinker’s damm about how many citizens would be devastated by such idiocy! Such an action would cripple a lot of ordinary folks who don’t have your ill gotten gains to rely on. I thought you were smarter than that! This is one Republican vote you just lost for your Presidential run.

Dave

January 18th, 2011
11:16 am

Purdue really screwed GA. All he did was use the state to benefit
him and his buddies.

Willx

January 18th, 2011
11:25 am

All you left wing socialists/marxists need to realize socialism has failed every time is been attempted. EVERY TIME! Now, take all pension funds back, especially those slush funds created by obama for votes, and put it immediately into a real trust fund politicians from any party can’t raid. Create a non-political commission to help those that can’t survive financially while we implement the FairTax plan. In Three years or less we will once again be the wealthiness Country and be able to fund emergency social programs for those truly in need and not the slackers sucking off the teets of the working tax payers. We will all pay less taxes, and pay for our childrens education and our retirement years. And, there will be no need to kill off Grandma like obama wants.

fairness for all

January 18th, 2011
11:26 am

several good points made here and there are many sides to this problem. georgia has taken steps over the years to correct the pensions for state employees. georgia has not taken good faith steps to keep the salaries of top level education employees in check thus their pensions have also gotten out of check as well. a wholesale review of georgia education salaries+pensions should be made and adjustments made to both salary and retirement benefits. for years georgia paid it’s state employees less than market wages but in return offered excellent retirement and insurance benefits—the state employees contributed to their retirements for many years and were not paid market wage and need to have those benefits protected. at present state employees are paid much better and the retirement system was changed and then basically stopped to adjust for the better pay. Judges, lawmakers, etc that want to piggyback on the state employee retirement system should not be allowed to do so. they should have their own system and not raid the state employees retirement fund. i believe the answer lies in cutting present spending/salaries/etc not in reneging on old retirement obligations and raising taxes on a select few (if taxes are to be raised they should be broad based and even).