The Upper Peninsula is about as far away from Detroit as you can get and still be in Michigan. Over the past several weeks, whether I am in Washington, D.C., or Michigan, people constantly ask me about Detroit and its bankruptcy. I am saddened to think that Detroit, whose dedicated labor force built and supplied the Arsenal of Democracy, created the middle class, invented the production line to manufacture affordable automobiles, and gave us Joe Louis, Motown, Eminem and so many other great musicians, artists and civic and national leaders, will attempt to file away its financial troubles in federal bankruptcy court.
During my 18 years in the U.S. House, I witnessed the greatest swing in the federal government's budgeting; from record surpluses to the deepest deficits. I advocated and fought for the Cash for Clunkers program and the loans for Chrysler and General Motors so that they could once again build the best cars in the world. I have never given up on the American Dream or my faith in the resilience and determination of the people from the Motor City. I cannot fathom how a petition for bankruptcy can give any Detroiter or Michigander an ounce of satisfaction. We are better than that, and we can do better. Detroit has been through hell and back. It is simply wrong to ask a federal judge to wipe the slate clean and place thousands of pensioners' retirement security in jeopardy. Both Detroit and the entire state of Michigan have too much at stake to simply walk away from their financial and moral commitments.
If Detroit is allowed to go through bankruptcy, its retired workers — including police officers, firefighters, janitors, bus drivers, garbage men, water treatment plant workers, transportation workers and all those who have worked hard to support their families and play by the rules — could see their current and future pension benefits decreased.
Michigan's state constitution is clear that pension payments are a contractual obligation of the state. Article IX, Section 24 states:
"The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby."
Even so, that state constitutional provision may not have any standing in federal bankruptcy court.
Still, state leaders who are sworn to uphold the state constitution could levy a "pension tax" on all Michiganders so Detroit's retirees would not have their pensions "diminished or impaired." In all honesty, I do not see the Legislature raising taxes again. But I do envision that every Michigan municipal or county bond offering will see higher interest rates that we, as taxpayers, will ultimately pay.
There are discussions taking place that claim that Detroit is not bankrupt and that its assets, like the Detroit Institute of Art and its collections, should be sold; that Belle Isle should be sold or developed; that the people living in the suburbs should pay more for water and sewer services, or that a toll should be charged on every car that moves in Detroit.
These assets should not be sold or taxed without a purpose. These Detroit assets could form the basis from which serious negotiations could begin to reach a solution that benefits every Detroiter and every Michigander. If we pull together, we will find a way through these tough times for Detroit. If a solution is not obvious, then we must create a solution.
I read and hear of all the divisions, discord and blame, and it is difficult to see how Detroit moves forward. Much like when I was in Congress, the answers were never easy and the solutions never obvious, but we did pull together, and we found our way through tough times. And if we could not find a way, we invented a new one. For Detroit, it is not important how we got here, what is important is what lies ahead.
Since 1954, when Detroit was one of the richest cities in the country, nearly half of the 62 municipalities that have since filed for bankruptcy found other ways to resolve their financial problems. Certainly, the Motor City can pull together and develop a plan that resolves its financial difficulties. Part of the solution to Detroit's financial difficulties may even require the participation of the people of the Upper Peninsula. Those of us living in the Upper Peninsula realize that a strong and vibrant Detroit leads to a strong and vibrant Michigan. We may be comprised of two very different Peninsulas, but we are still one great state of Michigan.
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