- - Tuesday, January 25, 2011

SENATE

Legislation option for hurting states

Senate Republican leaders said Tuesday they were considering introducing legislation that would allow financially stressed U.S. states to declare bankruptcy.

“We’re exploring that as a responsible option,” Sen. John Cornyn of Texas, who is heading the effort, told reporters.

Some Republicans embrace the idea, which would allow states to sort out finances and renegotiate contracts with public employee unions, as an alternative to sending in federal aid.

But analysts - and states themselves - are concerned the potential for bankruptcy would spook the buyers of debt from states, driving up interest rates and making borrowing more expensive.

Senate Republican leader Mitch McConnell, of Kentucky, said no decision has been reached on introducing legislation that would open bankruptcy courts to states beset by financial troubles from the 2007-2009 recession.

“There will be no bailout of states,” Mr. McConnell said.

The bankruptcy option was dismissed House Majority Whip Eric Cantor, Virginia Republican, on Monday, meaning any bill will face an uphill battle in that chamber.

Under the U.S. Constitution, states cannot declare bankruptcy as cities and counties can.

IOWA

Gingrich calls for replacing EPA

DES MOINES| Former House Speaker Newt Gingrich called Tuesday for the elimination of the Environmental Protection Agency, which he wants to replace with a new organization that would work more closely with businesses and be more aggressive in using science and technology.

In an interview with the Associated Press, Mr. Gingrich said the EPA was rarely innovative and focused only on issuing regulations and litigation.

“What you have is a very expensive bureaucracy that across the board makes it harder to solve problems, slows down the development of new innovations,” Mr. Gingrich said.

Mr. Gingrich, who has acknowledged that he’s mulling a run for the Republican presidential nomination, was in Iowa to talk to the Iowa Renewable Fuels Association. He also met privately with Republican legislators, often a sign in Iowa that people are laying the groundwork for a campaign. The state has the nation’s first presidential caucuses.

Mr. Gingrich, who has made several visits to Iowa recently, said the EPA was founded on sound ideas, but has become a traditional Washington bureaucracy. Tuesday was the first time he had proposed eliminating it, Mr. Gingrich spokesman R.C. Hammond said.

“We need to have an agency that is first of all limited, but cooperates with the 50 states,” Mr. Gingrich said. “The EPA is based on bureaucrats centered in Washington issuing regulations and litigation and basically opposing things.”

A telephone message left for EPA spokesman Brenden Gilfillan in Washington was not immediately returned.

NEW YORK

Rendell named NBC news analyst

NEW YORK| NBC News has named former Pennsylvania Gov. Edward G. Rendell as a political analyst.

Mr. Rendell, already a frequent guest on NBC News broadcasts, will contribute to both NBC and MSNBC as the 2012 presidential race heats up, the network announced Tuesday.

Mr. Rendell served two terms as Pennsylvania’s governor from 2003 to 2011. He was general chairman of the Democratic National Committee during the 2000 presidential election. He was mayor of Philadelphia from 1992 to 1999.

NBC says his analyst role begins immediately.

NEW HAMPSHIRE

Pawlenty eyes benefits limits

BEDFORD | Former Minnesota Gov. Tim Pawlenty says limiting Social Security payments to wealthier Americans could help the nation confront its mounting national deficit.

Mr. Pawlenty, a potential 2012 presidential contender, told an audience in the early-primary state of New Hampshire that annual increases in payments to wealthier Americans could be ended. The Republican says wealthier Americans don’t rely on such cost-of-living adjustments.

Mr. Pawlenty says drawing lines between classes is not ideal, but the nation faces a mathematical reality in what it can afford. He calls the step reasonable but not enough to solve the entire national deficit.

Mr. Pawlenty is visiting New Hampshire as part of a book tour. He says he will decide whether he will seek the White House in the coming weeks.

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