A Bailout for Detroit? White House Won't Say No

Image: A Bailout for Detroit? White House Won't Say No

Wednesday, 24 Jul 2013 09:56 AM

By John Gizzi

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Although the White House insisted Tuesday it has no plans to bail out cash-strapped Detroit, the president's top spokesman stopped short of ruling out federal relief for the largest city in the U.S. to declare bankruptcy.

Several reporters covering the regular White House press briefing noted the refusal of Press Secretary Jay Carney to use phrases such as "ruling out," "under no circumstances," or "off the table" on questions about a possible federal bailout similar to the Wall Street bailout of 2008 enacted under President George W. Bush and supported by President Barack Obama.

Carney's remarks came amid growing speculation in Michigan that public-sector unions are pressing the administration for a bailout to guarantee the pensions of retired Detroit city employees.

Asked by correspondent Ed Henry of Fox News if a program for assistance to Detroit was possible, Carney noted that he has been dealing with questions about it since Detroit filed a bankruptcy petition Friday.

"If your question is basically a version of the question, but expanded, that we've had for the past several days," he said, "then my answer hasn't changed —which is when it comes to the matter of the city's insolvency, that has to be resolved by local leaders and creditors."

Henry pressed him to rule out a federal bailout for Detroit or any other major city, twice asking Carney if the administration is"closing the door" on the matter.

Carney would only reply, "We have no plans to provide the kind of assistance you're talking about.The city has to and the state has to work that out with the city’s creditors."

To Henry's question as to what the White House would say to labor leaders whose union members "might lose their pensions," Carney said, "We will, of course, work with Detroit and have engaged with Detroit from our administration, and will continue to as it moves forward and deals with the challenges that face it."

Referring to the ruling Friday by state Judge Rosemarie Aquilina to halt the bankruptcy process, Detroit News columnist Henry Payne told Newsmax: "The unions filed this suit in Ingham County [Lansing] because they know it is a Democratic hive in which judges do their bidding. They are hoping to push this all the way to the White House to get a bailout. There's a larger game in play here."

On Tuesday, however, a Michigan Court of Appeals panel put a temporary halt to the three union lawsuits and Aquilina’s rulings to stop the process.  Earlier, a
bankruptcy judge ruled that federal court, not state courts, will decide pension issues.

John Gizzi is chief political columnist and White House correspondent for Newsmax.

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