Senate leaders eye option of State BankruptcySubmitted by bobbyw24 on Wed, 01/26/2011 - 16:24
(Reuters) - Senate Republican leaders said on Tuesday they were considering introducing legislation to allow financially stressed U.S. states to declare bankruptcy, even though the No. 2 Republican in the House of Representatives has rebuffed the idea.
"We're exploring that as a responsible option," Senator John Cornyn, who sits on both the Budget and Finance committees, told reporters.
Some Republicans have embraced the bankruptcy option, which would allow states to sort out finances and renegotiate contracts with public employee unions, as an alternative to sending in federal aid.