This Essay explores the constitutional implications of a threatened default by a large state. Much like the huge financial institutions that became distressed in 2008, a large state might well be deemed too big to fail. If that kind of state seeks a federal bailout, it would hold most of the cards in any negotiation because Congress lacks the power to compel a state to pay its debts. After outlining this hold-up issue, the Essay concludes by assessing some possible responses by Congress, such as invoking the Guarantee Clause or imposing future fiscal penalties under the Spending Clause.
Magliocca, Gerard N., ""Too Big to Fail" States Is Our Constitutional Order Broken - Structural and Doctrinal Questions in Constitutional Law: Equal Protection Protection Doctrine and Structural Federalism" (2011). Connecticut Law Review. 109.