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Fiorina suggests California consider bankruptcy [Updated]

Republican U.S. Senate candidate Carly Fiorina suggested that the state of California should consider declaring bankruptcy, apparently unaware that states cannot do that under federal bankruptcy law.

The comments were first reported Tuesday in the Riverside Press-Enterprise. Fiorina, the former head of Hewlett-Packard, hosted a business roundtable at a cement plant in Colton, Calif., and a businessman asked her if the state should consider filing for bankruptcy.  [Updated at 10:58 a.m.: An earlier version of this post incorrectly referred to the newspaper as the Riverside Press-Telegram.]

"I think it should always be considered," Fiorina replied. "Whether that is the right approach now, I don't know. I think bankruptcy, as a possibility, at the very least focuses the mind on what has to be done to salvage a situation."

Under federal law, municipalities can declare bankruptcy, as Orange County notably did in 1994. But states do not have the same ability. 

A spokesman for one of Fiorina’s rivals in the GOP race to take on incumbent Sen. Barbara Boxer said the gaffe shows that Fiorina, who has never sought political office before and has failed to vote in many elections, is unprepared.

"This is why Carly Fiorina is so tightly scripted as a rule: You never know what she'll say otherwise,” said Joshua Trevino, spokesman for Fiorina's opponent, state Assemblyman Chuck DeVore. “This is just another example of Fiorina's unreadiness for any elected office, to say nothing of the United States Senate. But then, we shouldn't expect a candidate who rarely voted to have a command of basic civics."

Fiorina’s spokeswoman said the candidate’s comments are being taken out of context.

“Carly knows that legally declaring bankruptcy isn’t an option for the state of California like it is for local governments,” said Julie Soderlund. “Her point is that the concept of the state not being able to pay its bills and meet its obligations -- and the fact that people are using the word ‘bankrupt’ to describe California's financial situation -- should focus the mind on just how bad the state's financial situation really is.”

-- Seema Mehta

 
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