'We Dug This Hole': Man Appointed to Save Detroit Defends Bankruptcy
This week, Detroit became the largest city to file for bankruptcy, facing an estimated debt of $19 billion dollars. Detroit Emergency Manager Kevyn Orr must now figure out how to run the city. He spoke to Chris Wallace on Fox News Sunday about what's next for the city.
A county judge ruled that the bankruptcy filing was unconstitutional under Michigan law because it violates the rights of city pensioners. Article 9, Section 24 reads: “Financial benefits of each pension plan and retirement system of the state and its political subdivisions […] shall not be diminished.”
Orr said the state is appealing the court order because filing for bankruptcy is “the only way” to resolve the grievous problems. Under his plan, pensioners would be paid for the next six months. After that, he acknowledged, “there are going to have to be concessions.”
When asked whether the federal or state government should step in to help, Orr responded, “we dug this hole.”
He said Detroit is responsible for fixing the problem that they created through unfunded obligations, deferrals, borrowing and even corruption.
Despite critics of the filing who argue that Detroit will have a hard time borrowing money in the future, Orr said, “The reality is [investors are] going to look at the credit rating of a rehabilitated city.”
As to how long it will take for Detroit to be back in business, Orr hopes it will be around the fall of 2014.