Municipal Government

Preventing Detroit Bankruptcy Priority for Labor and President

September 18, 2013
By Neal Tepel

Washington, DC — Ongoing meetings are taking place between labor leaders and the White House discussing ways to address the financial crisis in Detroit. While a federal bailout has been ruled out, top union officials along with the AFL-CIO leadership have been meeting with the Obama administration hoping to avoid the largest municipal bankruptcy in U.S. history.

A recent meeting with top Obama officials included UAW President Bob King, AFSCME President Lee Saunders, SEIU President Mary Kay Henry, AFT President Randi Weingarten, and IAFF President Harold Schaitberger.

“This is not only a Detroit problem," said AFSCME President Lee Saunders. " This is an issue that confronts urban centers across the country.”

Detroit’s bankruptcy is being taken very seriously by the White House and a solution without a bailout is a priority.
Both Labor Secretary Thomas Perez and Shaun Donovan, secretary of Housing and Urban Development are heading the team that would be responsible for the planning of a financial solution preventing a financial catastrophe should Detroit go bankrupt.

The White House has made clear it won’t get between the city and its creditors. While union officials have raised concerns that public services, as well as active and retired employees, should be protected, the administration has indicated it would not get involved in guaranteeing employee benefits.

Rep. Gary Peters, D-Mich., has sent a letter to President Obama calling on him to appoint an interagency task force for Detroit that would assist in providing federal and private investments in the city.

The Obama administration has been reaching out to business and charitable organizations across the country for suggestions and planned assistance.

The White House is also looking at various grant programs that could be utilized as part of a solution.

September 17, 2013

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