McConnell state bankruptcy remarks raise constitutional questions

Municipal finance experts say that it may be unconstitutional for Congress to allow states to declare bankruptcy, and that even if it is constitutional, it would be a bad idea.

Experts on state and local government finances say that Congress may not have the right to grant states the ability to file for bankruptcy under the Constitution. They also argued that bankruptcy wouldn’t be particularly helpful in addressing states’ coronavirus-related challenges.

“Bankruptcy is just not a viable solution to the issues state and local governments are facing,” said Michael Decker, senior vice president for federal policy at the Bond Dealers of America. Continue reading.