GOP Senators Seek to Prevent Detroit Bailout

Audience stands and applauds the speakers at the Moratorium NOW! Coalition rally demanding that the banks pay for the financial crisis in Detroit. The event attracted a standing room only audience. (Photo: Abayomi Azikiwe), a photo by Pan-African News Wire File Photos on Flickr.

July 24, 2013 at 11:16 pm

GOP senators seek to prevent Detroit bailout

Senate group drafts bill to ensure city gets no federal aid

Marisa Schultz
The Detroit News

Washington — A group of Republican senators wants to make sure the city of Detroit doesn’t get any taxpayer bailout.

A trio of senators authored an amendment Wednesday to a pending transportation bill to ensure no federal dollars be used to help state or local municipalities grappling with receivership.

“Detroit’s debt is a national poster-child of what can result when politicians enter into an unholy alliance with powerful unions at the expense of the local economy and the people who live there,” said sponsor Sen. Ron Johnson, R-Wis. in announcing his amendment.

Since Detroit announced the largest municipal bankruptcy in U.S. history last week, there’s been little movement in Washington to offer federal support. Unlike when General Motors and Chrysler were on the brink of collapse, there’s been no organized legislative response to help Detroit tackle its debt of more than $18 billion.

Members of the Michigan congressional delegation realize there’s no political appetite in Washington for a Detroit “bailout.” Still, lawmakers from others states want to ensure such an idea doesn’t gain traction.

“it’s the responsibility of the local governments to fix,” said amendment author Sen. Orrin Hatch, R-Utah. “The federal government will not step in, as this amendment makes clear, and bail them out. We’re not going to leave taxpayers on the hook because local governments can’t manage a budget and live within their means.”

Sen. David Vitter, R-La., also signed on to the transportation amendment.

Meantime, U.S. Rep. Dan Kildee, D-Flint Township, offered the first floor speech Wednesday on Detroit bankruptcy. Kildee, who successfully pushed for $100 million in federal funds for blight removal in Detroit and other Michigan cities, called for Congress to consider supporting cities to prevent future bankruptcies.

“Detroit’s bankruptcy should be a call to action,” Kildee said. “A call to action to have a much bigger conversation in this country about how we support cities and metropolitan areas, where an overwhelming majority of our country’s wealth is generated, ideas are created and population is located.”

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From The Detroit News: http://www.detroitnews.com/article/20130724/METRO01/307240119#ixzz2a1al4tZH