Michigan governor says bankruptcy right choice
Detroit • It wasn't easy making Detroit the largest U.S. city to file for bankruptcy protection, but it was the right decision, Michigan Gov. Rick Snyder said Sunday as he, the city's mayor and its emergency manager made the television talk show rounds.
Snyder, a Republican, gave his blessing to emergency manager Kevyn Orr's decision to file for bankruptcy for Detroit on Thursday.
"We looked through every other viable option," Snyder said on CBS' "Face the Nation."
"The debt question needs to be addressed. But even more important is the accountability to the citizens of Detroit," said Snyder. "They are not getting the services they deserve and they haven't for a very long time. So this can has been getting kicked down the road for decades. Enough is enough, and now's the time to turn it around."
On NBC's "Meet the Press," Snyder said if Detroit's restructuring proves successful, the city could roar back stronger than before.
The state hired Orr in March to fix Detroit's ballooning debt and more than $300 million budget deficit. He is a turnaround specialist and represented automaker Chrysler LLC during its successful restructuring.
Orr laid out his plans in a June meeting with debt-holders, in which his team warned there was a 50-50 chance of a bankruptcy filing. The city then stopped paying $2.5 billion in unsecured debt to "conserve cash" for police, fire and other services.
Orr has said Detroit's long-term debt burden could be as much as $20 billion.
During the past six decades, Detroit's population has shrunk from 1.8 million to about 700,000. The city has about 10,000 active public workers and 18,000 retired ones who are still owed pension and health benefits.
The costs of health care and pension contributions over the years have outpaced the revenue Detroit was bringing in from property and business taxes and other sources. The city has been unable to make those contributions and pay payroll and other bills.
Funds that cover retiree health coverage are underfunded by about $5.7 billion. Ones that cover pension obligations are underfunded by about $3.5 billion.
"We're going to have a dialogue with the pension funds about what we can do," Orr told "Fox News Sunday."
"And all we're talking about in this restructuring is the unfunded component of those pension funds," he said. "There have to be concessions."
Bing, a first-term mayor who announced earlier this year he would not seek re-election in the fall, has been opposed to state oversight and bankruptcy. On Sunday, he told ABC's "This Week" that he hopes the filing can be a new start for the city.
"Detroiters are very, very resilient people," said Bing, a professional basketball Hall-of-Famer who spent most of his career with the NBA's Detroit Pistons. "Detroit is a very iconic city, worldwide. Its people will fight for this and we will come back."
But he doesn't expect much, if any, help in the way of bailout money from the federal government.
"Now that the (bankruptcy) filing is done, we need to step back and see what's next," Bing said. "The president has a lot on his plate. More than 100 major urban cities are struggling and going through this. We may be the first and one of largest, but we won't be the last."