Treasurer Bill LockYer says he's frustrated by reports of a possible bill in Congress that would allow states to declare bankruptcy:

LOCKYER: "it's a cynical proposal intended to incite a panicked response to a phony crisis.  Killer bees, space aliens, now it's the invasion of the bankrupt states."

Lockyer says Republicans shouldn't be worried about them asking Washington for a bailout.  He says states already have the tools they need to balance their budgets.  He says they don't want bankruptcy power - and wouldn't use it:

LOCKYER:  "It would severely injure a state's economy, local businesses, working families, investors and taxpayers."

Lockyer says even talk of bankruptcy could mean higher interest rates on borrowing.