NY Bankruptcy, NY Bonds, NY Constitution, NY Pensions; The Resolution

Debt, n.  An ingenious substitute for the chain and whip of the slavedriver.  ~Ambrose Bierce

Neither a borrower, nor a lender be. ~Shakespeare

     We look to the NY Constitution to see why New York must chose bankruptcy if it's available under Federal Law.   Would the federal government refuse to loan or give NY Money, because "Federal loans to States would so increase federal debt so as to lower the federal bond ratings?"   Yes, because there'll be no love lost in the new Congress for bailing out New York's or other States' proliferate spending when the Congress has its own problems.  "The Treasury Department, in its regular budget monthly statement, said the government spent $150.4 billion more than it collected in the second month of fiscal 2011."  New York's deficit is pegged at $15.8 Billion , but if NY gets money, California, Illinois and Michigan will also want bailout money.
Simple question: Will Congress bailout States or create a new Bankruptcy Chapter?
 
        When New York State runs out of money, (technically bankrupt or bankrupt if the new Chapter 10 is adopted), the NY Constitution requires the Comptroller "shall set apart from the first revenues thereafter received ...a sum sufficient to pay such interest, installments of principal. ... at the suit of any holder of such bonds."   The applicable part of NY Constitution is copied below: (note word in red, "may" or it's up to the whim of a New York judge or a federal judge if the bondholder is not a resident of New York )


NY Constitution § 16. The legislature shall annually provide by appropriation for the payment of the interest upon and installments of principal of all debts or refunding debts .... If at any time the legislature shall fail to make any such appropriation, the comptroller shall set apart from the first revenues thereafter received, applicable to the general fund of the state, a sum sufficient to pay such interest, installments of principal, or contributions to such sinking fund, as the case may be,and shall so apply the moneys thus set apart. The comptroller may be required to set aside and apply such revenues as aforesaid, at the suit of any holder of such bonds.

    Supposedly NY Pension Benefits are protected in this article of NY Constitution § 7. ...membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired.

       No way out except for New York to limit its payments to NY bondholders in federal bankruptcy action.