Rep. Eric Cantor: 'No bailout of the states'

House Majority Leader Eric Cantor (R-Va.) issued a new threat against a federal bailout for ailing state governments Monday as GOP leaders girded for a confrontation with President Obama over spending. 

Heading into Tuesday’s State of the Union address, Cantor showed no desire for increases in virtually any area of the federal government, and he doubled down on his opposition to new proposed spending on infrastructure and education, even in areas, like transportation, where he acknowledged there were deficiencies.

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Cantor flatly rejected any changes in the law that would allow state governments struggling with record budget deficits brought on by the economic recession and rising pension costs to restructure debt, including allowing them to declare bankruptcy.

“I don’t think that that is necessary, because state governments have at their disposal the requisite tools to address their fiscal ills,” the majority leader said, before going a step further.

“I think some ... have mentioned this Chapter 9 equivalent for states is somehow going to stave off some kind of federal bailout — we don’t need that to stave off a federal bailout. There will be no bailout of the states,” Cantor said. “States can deal with this and have the ability to do so on their own.” 

The stark remarks set up a State of the Union in which heightened attempts at presenting a tone of civility between the parties will mask sharp differences across the board on policy. Hours before Obama is to speak at 9 p.m., House Republicans plan to approve a resolution instructing the chairman of the House Budget Committee, Rep. Paul Ryan (R-Wis.), to set spending at the level it stood at in 2008 or less. Ryan will also deliver the official GOP response to Obama’s speech.

 While voicing support for reducing the deficit, Obama is expected to call for more investment — what Cantor called “a code word” for spending — in education, infrastructure and scientific research as part of a broader agenda to boost America’s global competitiveness. Those areas have traditionally won bipartisan support, but Cantor said they are in line for budget cuts, not increases.

 “Transportation, education, defense — as I said before, everything is on the table,” the majority leader told reporters at his weekly briefing. “We’ve got to learn how to prioritize and do more with less in all areas of government. It just is what it is.”

 Cantor acknowledged the need to “address” the nation’s aging transportation system, and cited congested and outmoded aviation networks and crumbling roads and bridges as national concerns. “I don’t think anybody would tell you that our nation’s transportation infrastructure is in a state of existence that we would accept,” he said.

But he struggled to answer the question of how those areas would be improved without more money. “It’s not some easy answer — just spend more,” Cantor said. “That’s not good enough, because the money’s not there. We don’t have the money.”

 Cantor would not say directly whether Republicans would be open to budget increases in some areas, like infrastructure, if the overall level of spending were reduced to their satisfaction. “It won’t necessarily be a straight-up, flat decrease across the board,” he said. “Some programs may be eliminated, some cut more than others, absolutely.”

 At the White House, press secretary Robert Gibbs would not expand on what to expect from the address beyond the preview Obama gave in a video addressed to his supporters on Sunday, in which he spoke about a competitiveness agenda. Obama, Gibbs said, will “spend most of his time talking about the economy, talking about the challenges that we face both in the short term in terms of doing whatever we can to help create jobs, in the medium and long term to continue working on issues like competitiveness and innovation, and ensuring that in the medium and the long term we get our fiscal house in order.” 

He also declined to respond directly to Republican leaders who signaled their opposition to any new spending on infrastructure, education and research. 

Gibbs said the need to get a handle on spending was obvious. “We’re not going to have a debate in Washington about whether we need to make some changes and whether we need to control spending,” he said. “We’re going to have, hopefully, a bipartisan discussion and work together on how we go about doing that.”


This story was posted at 3:40 p.m. and updated at 6:48 p.m. and 8:24 p.m.