Cantor: No Bailouts, Bankruptcy for States

Lawmakers from both sides of the aisle are in favor of changing the rules to allow cash-strapped states to seek bankruptcy protection, but House Majority Leader Eric Cantor is pooh-poohing the idea. Cantor says states already have the power to balance their books through cutting spending, raising taxes, or renegotiating agreements with labor unions, the Washington Post reports.

States facing budget shortfalls—which will be all but six of them in the next fiscal year, according to the Center on Budget and Policy Priorities—shouldn't expect help from Washington, either, Cantor told reporters. "There will not be a federal bailout of the states," he said. Prominent conservatives including Newt Gingrich are supporting the idea of opening bankruptcy courts to states, but Cantor's stance makes it unlikely that any such legislation will make it through the House, Reuters notes. (More Eric Cantor stories.)