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State bankruptcy bill imminent, Gingrich says

January 23, 2011 Comments off

Lisa Lambert

WASHINGTON— Legislation that would allow U.S. states to file for bankruptcy will likely be introduced in Congress within the next month, Newt Gingrich, the former speaker of the House of Representatives and a powerful Republican party figure, told Reuters on Friday.

California Governor Jerry Brown’s Finance Director Ana Matosantos (R) holds his budget proposal in Sacramento, California January 10, 2011. REUTERS/Max Whittaker
Although Gingrich, considered responsible for the “Republican Revolution” of the 1990’s, is no longer in office, he has deep ties to Congress and is frequently named as a potential presidential contender in 2012.

For months he has championed letting states file for bankruptcy in order to handle their long-term budget problems despite resistance from states and investors in the $2.8 trillion municipal bond market.

“We’re faced with the danger that the states are going to try to show up and say to Washington: You have to give us money,” Gingrich said. “And I think we have to have an alternative that allows us to say no.” Read more…