Experts Spar In House Over State Bankruptcy Option

Law360, New York (February 9, 2011, 4:03 PM EST) -- Experts testifying before lawmakers Wednesday were divided on whether a state bankruptcy option would save cash-strapped states from potential bailouts.

Such an option may do little to resolve states' money woes and would not address the true causes of those woes, Nicole Gelinas, a fellow at the conservative Manhattan Institute for Policy Research, told the House Oversight and Government Reform Committee’s Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs.

But bankruptcy may be the only way to save states from defaulting on...
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