Yesterday, President Obama gave yet another eloquent and beautiful speech about the economy. He vividly described the problem of "rising inequality and declining mobility." He discussed empowering workers, creating promise zones, raising the minimum wage, enacting the Pay Check Fairness Act and enacting the Employment Non-Discrimination Act. He said all of the right things. He usually does. Aside from his sharp rhetoric about class inequality, we heard this speech before.
Five years into the Obama Presidency and all we get is more speeches about the economy. Congress refuses to act. As black unemployment remains disproportionately high, all we get is more speeches. Congress refuses to act. As Detroit goes bankrupt and retired city workers face the real prospect of losing their pensions, all we get is more speeches. Congress refuses to act. The New York Times reports that:
In a ruling that could reverberate far beyond Detroit, a federal judge held on Tuesday that this battered city could formally enter bankruptcy and asserted that Detroit’s obligation to pay pensions in full was not untouchable.If Congress and the White House can get together to bail out filthy rich, avaricious companies on Wall Street, why can't they get together to bail out Detroit and the rest of Main Street?!? Why can't they enact the legislation that the President mentioned? If the U.S. can afford to squander billions in Afghanistan, why can't the U.S. bail out Detroit and the rest of Main Street? We don't need any more beautiful speeches. We need action. Instead of patiently waiting on Congress to save us, we must force them and the White House to act.
The judge, Steven W. Rhodes, dealt a major blow to the widely held belief that state laws preserve public pensions, and his ruling is likely to resonate in Chicago, Los Angeles, Philadelphia and many other American cities where the rising cost of pensions has been crowding out spending for public schools, police departments and other services.
The judge made it clear that public employee pensions were not protected in a federal Chapter 9 bankruptcy, even though the Michigan Constitution expressly protects them. “Pension benefits are a contractual right and are not entitled to any heightened protection in a municipal bankruptcy,” he said.
James E. Spiotto, a lawyer with the firm Chapman & Cutler in Chicago who specializes in municipal bankruptcy and was not involved in the case, said: “No bankruptcy court had ruled that before. It will be instructive.”