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Thu July 25, 2013
U.S. senators want to prevent a federal bailout of Detroit
A group of Republican U.S. senators wants to prohibit the federal government from providing financial support to Detroit.
Senators Ron Johnson of Wisconsin, Orrin Hatch of Utah and David Vitter of Louisiana have introduced legislation that would block the federal government from intervening in municipal bankruptcies.
Governor Rick Snyder and Detroit's Emergency Manager have both said they have not asked for and do not expect a federal bailout. The Obama administration has said Detroit's bankruptcy is between the city and its creditors.
Still, Senator Johnson says he wants to make sure all struggling cities know that feds won't bail them out.
"What we're trying to do here is put all states, all municipalities, all cities on notice that the federal government certainly is in no position to bail them out," he said. "Those municipalities, those cities, those states really need to get their own fiscal house in order, and shouldn't continue to spend and look to the federal government to bail them out."
The AFL-CIO has asked the Obama administration to provide financial support to the city to save the pensions of public employees.
Johnson says the amendment is a "preemptive strike."
"It is about putting -- not just Detroit -- but every city and municipality and state on notice that is incurring deficit after deficit, year after year, that they're really not making provisions to properly pay for them," he said.
Johnson hopes the amendment will be voted on next week.
-Sarah Kerson, Michigan Radio Newsroom