Only CA and IL are technically in default now. Not paying interest on IOUs for CA and not paying vendors for IL and usually these kids of defaults can be and have been ignored for years but the mortgage deduction cap and SALT provisions will get both states junk graded. That will trigger banktuptcy. Then will come other problems such as a criminal investigation of the politicians of both states. There may also be prison terms. I am just trying to figure out when, not if.