NY Will Follow Greece to default as NY Budget Director Reveals NY Can't Finance Budget; Congress Asked for State Bankruptcy Law

FOR IMMEDIATE RELEASE
Plattsburgh, New York, United States of America (Free-Press-Release.com) July 26, 2011 -- The blog CuomoTARP.blogspot.com latest post is entitled, "NY Will Follow Greece; NY Budget Director Reveals NY Can't Finance Budget; Congress Asked for State Bankruptcy Law" shows NY State on the path to default like Greece, because like Greece, NY State does not have its own currency and its expenses exceed its borrowing capacity.

The blog is a copy of a letter to the three bond rating agencies, Moody's, Fitch, Standard and Poors, and members of Congress, including Reid, McConnell and Boehner in regard: Greece in the USA; NY Budget Director can't finance NY budget; bankruptcy law needed.

The letter continues

: Moody's reports default on Greek debt almost certain. New York State has the highest debt per person in the USA ($24,195) and the second highest taxes per person ($6,884). This is a Heads-up call to Rating Agencies and Congress that New York State has run out of money and a Greek-like bail-out request is coming. Andrew Cuomo's Budget director says, he has no ability to finance spending commitments already. This was recorded at a 7/20/2011 hearing of Cuomo's Commission on Judicial Compensation: "We don't even have the ability to finance the spending commitment that are already in place, said Robert L. Megna, who was speaking on behalf of Governor Andrew Cuomo, who appointed three of the commission's seven members." The blog links to the audio of Megna's testimony.

The blog tells Congress, New York State needs the option to go bankrupt and presents the simple changes to the existing Chapter 9 necessary to create a Chapter 10 Bankruptcy for States. Cuomo will run out of cash. But, he's not alone, several governors will join him. They need a cover, who'll stiff the State bondholders and redo employee contractual benefits and pay. It's not me (your beloved Elected Governor), it's the bankruptcy judge.

Is it Constitutional? Yes, because the law proposed below was only modified by replacing the words referring to a State's municipality, with the word(s) referring only to a State. "The first municipal bankruptcy legislation was enacted in 1934. ..., the Supreme Court held the 1934 Act unconstitutional as an improper interference with the sovereignty of the states. Ashton v.Cameron County Water Improvement District No. 1, [Then] Congress enacted a revised Municipal Bankruptcy Act in 1937, ... which was upheld by the Supreme Court. United States v. Bekins."

The proposed Chapter 10 for States has identically to the existing constitutional Chapter 9, no provision for the sale of assets, nor for such to be given to creditors. Just as in Chapter 9, the bankruptcy court cannot actively mange the State's affairs, and can only approve a reorganization plan submitted by the State. And as in Chapter 9,; the State can use the bankruptcy court to enforce court orders and preclude any connected litigation elsewhere and change contractual agreements.

The details In the proposed Chapter 10 are:

1. The bankruptcy judge is assigned by the Chief Federal Judge of the State;
2. A list of all creditors can be filed after filing bankruptcy petition;
3. Automatic stays of all collections against the State can be stayed; the court can fix time and manner of the filing of all claims against the State;
4. Only the State and not creditors, nor someone appointed by the bankruptcy court can propose a settlement;
5. The State retains its powers to use its property, raise taxes, and make expenditures and change non-debt contractual relationships;
6. The State can reject collective bargaining agreements and retiree benefit plans;

7. Interested parties may be heard, but no one but the State can file a PLAN for resolution of the debts and obligations.

The blog continues with the specific changes for a Proposed Chapter 10 and discusses why must Bankruptcy for States must be different from ordinary bankruptcy. While, Congress has the power to make laws for bankruptcy under Article 1-Section 8 of the US Constitution, the States cannot make their own bankruptcy laws because of Article 1-Section 8 of US Constitution. Without bankruptcy, States could not void or alter contracts with State employees or bondholders or other contract holders under Article 1-Section 10 of the US Constitution. States also must honor the judicial acts of other States involving contracts with NY State under Article 4-Section 1 of US Constitution. And States retain all sovereign powers except those removed by the Constitution based upon Amendment 10.

More information can be found online at http://CuomoTARP.blogspot.com

Chapter 10 Bankruptcy     Com. Judicial Compensation     fitch     moody     NY Budget     NY debt per person     NY State default bankruptcy     NY taxes per person     Robert Megna     S and P