WASHINGTON, Dec. 3 – A federal bankruptcy judge ruled Tuesday that Detroit was eligible to enter Chapter 9 bankruptcy, which means all of the city’s debts, including pensions owed to public-sector workers, can be renegotiated to help address its financial shortfalls.
Aloysius Hogan, Senior Fellow in Labor Policy at The Competitive Enterprise Institute (cei.org), had the following to say:
“What [U.S. Bankruptcy] Judge Steven Rhodes said today is correct. The city is insolvent and cannot afford even basic first-responder services. And for the unions who negotiated these pensions that took down a great American city to then refuse to play any part in the city’s recovery would be laughable were it not so unconscionable.
“What’s at issue here is more than the finances of a once-great American city. It also is the matter of public-sector unions and the politicians they help elect sitting down together to negotiate contracts for which neither, until now, has had to pay.
“That is the relationship Scott Walker stopped in Wisconsin, Rick Snyder has attempted to address in Michigan and which must be addressed everywhere if we are to avoid hundreds of cities coming before bankruptcy judges in the next few years. You can’t have both sides in a negotiation insisting on more, more, more … particularly when the public treasury is at stake.”