Republicans for State Bankruptcy

Congressional Republicans might be planning to stymie the ability of states to raise money through tax-free bonds next year. The Build America Bonds program accounts for 20% of state budgeting, and Republicans intend to dry up the well, pushing states into bankruptcy.

This seems like a monumentally bad idea for Republicans. First of all, despite the wonk-level of this issue, Republican hands will be blamed for states declaring bankruptcies. Federal government may be an unpopular term in America, but local government is not nearly as hated and feared among Republican faithful. Republicans will get the blame for opening a need for more federal intrusiveness into everyday life as states are unable to carry their traditional burden. Even if they don't, this practically undoes all the pro-state federalism work that small government conservatives claim to believe in. Apparently Congressional Republicans don't believe in principled federalism, but do know that it's a useful cudgel with which to beat the federal government.

Second, aren't bonds exactly the method of funding government that Republicans would want to be unfettered? It's a voluntary participation in the continuation of the state. It is the closest that a citizen born into a society get to forming a social contract. Government bonds are a decision which financially buys the citizen into the stability of the state, giving them a larger interest in the wisdom of the state's policies.

Not to mention, if a significant amount of bond-funding for states dries up, won't the gap be filled with higher taxes, which everyone who can suffer the modern GOP is obligated to hate in all forms?

Thirdly, state bankruptcy is a really bad idea. The Republicans, if bankruptcy is indeed their goal, are going back all the way to the federal assumption of state debt following the revolutionary war. Republicans are undoing Hamilton's work which established the United States of America as faithful and responsible debtors.

I need to get on a plane- would someone please tell me what's going on here?