The federal bailout is exactly what is going to happen. The Pew numbers are somewhat optimistic in terms of overall liabilities. My estimation (and its just that) is that when we really dig in we are going to find that things are much, much worse. Some states will have their budgets overwhelmed with pension costs and I don't think there will be the political will to say, "Well Massachusetts, best of luck. This is what you voted for and now the tab has arrived."

Washington will also look at this as an opportunity to take more power from states and move it to DC. Of course they can also print/borrow money do this.