Thread: EXCLUSIVE--RAND PAUL: OBAMA WILL BAIL OUT DETROIT 'OVER MY DEAD BODY

EXCLUSIVE--RAND PAUL: OBAMA WILL BAIL OUT DETROIT 'OVER MY DEAD BODY'



by MATTHEW BOYLE 19 Jul 2013, 8:11 AM PDT 776 POST A COMMENT

Sen. Rand Paul (R-KY) said he will use every resource he has at his disposal to stop President Barack Obama from bailing out newly-bankrupt Detroit because he believes the city can and must save itself and learn from its fiscal mistakes. "I basically say he [Obama] is bailing them out over my dead body because we don’t have any money in Washington.”

“There’s some good things that come out of bankruptcy,” Paul said in a phone interview from Iowa. “One is you get to start over. Bankruptcy lets you be forgiven of your debt. And you do so by getting new management, better management, and by getting rid of unwieldy contracts, contracts that give you where public employees are getting paid twice what private employees are and things come back more to normal. That’s the way cities and businesses can recover.

"I basically say he [Obama] is bailing them out over my dead body because we don’t have any money in Washington.”

The White House said it is monitoring the situation in Detroit, but has not made any official moves towards a bailout yet. But Obama’s former auto czar Steven Rattner said on MSNBC on Friday that he is calling on Obama to bail out Detroit. Paul said that "apparently" Obama is "making indications that Detroit can be expected to be bailed out."

Paul said the reason he is going to fight to stop any efforts to bail out Detroit is that if the president succeeds in bailing it out, that will send a signal to the rest of cities and states nationwide that the federal government will bail them out to if they conduct reckless spending.

“Those who don’t have their house in order, who are teetering on disaster, will continue to make bad decisions. And by the way these [local and state budget choices] are tough decisions. I’m not saying they are all prescient and that it will be easy on everybody who works for the city or the state, but you need to make these decisions and the sooner you make them the better. If you wait to make them, it’s even harder on people.”

Detroit is just the latest in the long line of cities that have found themselves in financial trouble lately. Stockton, Calif., is another example of a major city that needed to file for bankruptcy. Paul said that any federal bailout would only make those problems worse.

“You don’t set up an implicit promise from the federal government that everybody is getting bailed out,” Paul said. “It’s sort of like too big to fail for banks. If you have too big to fail for cities or for states and they believe they’ll be bailed out they’ll continue to make unwise decisions.

"So, really, the answer is, just like the federal government, live within your means and spend what you have but don’t spend money you don’t have. The problem is so many of our state governments, the politicians are being elected by the public service unions. If the public service unions want to be paid twice as much as what private sector employees make, they want twice as good benefits and twice as good a pension.

"I mean the statistics in California are staggering. I think there’s over 100,000 people there getting over $100,000 a year in retirement. You got police chiefs in medium-sized cities getting $350,000 a year for a salary. It’s become untenable. But the main thing is we cannot send a signal from the federal government that cities and states are going to be too big to fail.”

Ultimately, Paul said, if Detroit had been more fiscally responsible before, this process would not have needed to happen. “Bankruptcy in Detroit is going to much harder than if ten years ago, they had started downsizing and making their pensions and salaries more commensurate with the private sector,” he said.

http://www.breitbart.com/Big-Governm...r-my-dead-body

http://www.alipac.us/f19/u-s-governm...s-year-283820/

Michigan AG challenges judge's ruling that Detroit bankruptcy is unconstitutional

2:56 PM, July 19, 2013 | 167 Comments



Detroit emergency manager Kevyn Orr announces Thursday, July 18, 2013 that he filed for municipal bankruptcy. The filing is the largest of its kind in terms of populations and size of the debts and liabilities involved.

By Paul Egan
Detroit Free Press Lansing Bureau


Ingham County Judge Rosemarie Aquilina says Thursday's historic Detroit bankruptcy filing violates the Michigan Constitution and state law and must be withdrawn. / Stephen McGee/Detroit Free Press

LANSING — An Ingham County judge says Thursday's historic Detroit bankruptcy filing violates the Michigan Constitution and state law and must be withdrawn.

But Attorney General Bill Schuette said he will appeal Circuit Judge Rosemarie Aquilina’s Friday rulings and seek emergency consideration by the Michigan Court of Appeals. He wants her orders stayed pending the appeals, he said in a news release.

In a spate of orders today arising from three separate lawsuits, Aquilina said Gov. Rick Snyder and Detroit emergency manager Kevyn Orr must take no further actions that threaten to diminish the pension benefits of City of Detroit retirees.

“I have some very serious concerns because there was this rush to bankruptcy court that didn’t have to occur and shouldn’t have occurred,” Aquilina said.

“Plaintiffs shouldn’t have been blindsided,” and “this process shouldn’t have been ignored.”

■ Related: Read the judge’s orders
■ Related: Clerk files formal request to assign judge to Detroit bankruptcy case

Lawyers representing pensioners and two city pension funds got an emergency hearing with Aquilina Thursday at which she said she planned to issue an order to block the bankruptcy filing. But lawyers and the judge learned Orr filed the Detroit bankruptcy petition in Detroit five minutes before the hearing began.

Aquilina said the Michigan Constitution prohibits actions that will lessen the pension benefits of public employees, including those in the City of Detroit. Snyder and Orr violated the constitution by going ahead with the bankruptcy filing, because they know reductions in those benefits will result, Aquilina said.

“We can’t speculate what the bankruptcy court might order,” said assistant Attorney General Brian Devlin, representing the governor and other state defendants.

“It’s a certainty, sir,” Aquilina replied. “That’s why you filed for bankruptcy.”

Devlin said Snyder has to follow both the Michigan Constitution and the U.S. Constitution.

Schuette’s office issued a statement saying an appeal has been filed on behalf of the governor in all three cases before Aquilina.
“In addition, the Attorney General filed motions to stay the trial court rulings and any future proceedings while the appeals proceed,” spokeswoman Joy Yearout said. “Later today, we expect to file additional motions seeking emergency consideration.”

Aquilina issued a declaratory judgment that says the bankruptcy filing violated the Michigan Constitution.

“In order to rectify his unauthorized and unconstitutional actions ... the Governor must (1) direct the Emergency Manager to immediately withdraw the Chapter 9 petition filed on July 18, and (2) not authorize any further Chapter 9 filing which threatens to diminish or impair accrued pension benefits,” she said in her order.

John Canzano, a Southfield attorney representing retirees, cautioned there are no contempt implications for Snyder if he doesn’t follow the judge’s instructions. But he said he will likely return to court seeking further relief if Snyder doesn’t instruct Orr to withdraw the bankruptcy filing.

Asked what the judge could then do, Canzano said: “I will have to do my homework.”

Douglas Bernstein, a partner with Plunkett Cooney in Birmingham, said Aquilina’s ruling is surprising.

“This is generally how bankruptcies occur: You file bankruptcy when there is an impending crisis at the eleventh hour,” Bernstein said. “You file bankruptcies to stave off litigation.”

University of Michigan law professor John Pottow said the issue could travel up the court system, all the way to the Michigan Supreme Court. Or it could be answered decisively and quickly in bankruptcy court, he said.

“There’s nothing that precludes a federal judge from adjudicating the constitutionality of the Michigan statute,” Pottow said. “The bankruptcy judge can interpret Michigan law.”

Aquilina, who like most of the judges on the Ingham court has a Democratic background, appeared prepared for the likelihood her orders will be appealed by the state.

“Let’s get this moving to the Court of Appeals, because that’s where you all are headed,” she said.

She also ordered that a copy of her declaratory judgment be sent to President Barack Obama, saying he “bailed out Detroit” and may want to look into the pension issue.

Free Press staff writers Brent Snavely and Nathaniel Bomey contributed to this report. Contact Paul Egan: 517-372-8660 or pegan@freepress.com

http://www.freep.com/article/2013071...uilina-pension

She also ordered that a copy of her declaratory judgment be sent to President Barack Obama, saying he “bailed out Detroit” and may want to look into the pension issue.

Michigan Judge Halts Detroit Bankruptcy; Sends Order To Barack Obama Because He ‘Bailed Out Detroit’

July 19, 2013 by Ben Bullard

The Michigan Circuit Judge who blocked Detroit’s filing for bankruptcy protection put an exclamation point on her rulings, stipulating in her judgment Friday that President Barack Obama be sent a copy of her order, saying he “bailed out Detroit” and should be involved in figuring out how public employees’ pension funds won’t be raided to pay off creditors.

Aquilina was doubtless referencing the Obama Administration’s extension of $80 billion in loans, begun under George W. Bush, to automotive companies that hemorrhaged money in 2008 and 2009.

Under the judge’s order, Republican Governor Rick Snyder and Detroit emergency manager Kevyn Orr can’t start talking with creditors about how to write off debt until the pensions of public employees can be guaranteed, as required by the Michigan State Constitution.

White House Press Secretary Jay Carney said Friday the President has no plans to become involved in a bailout of what could be the biggest American city to file for bankruptcy in U.S. history. Vice President Joe Biden, meanwhile, was telling reporters in Washington “We don’t know at this point” if the government will step in.

Senator Rand Paul’s (R-Ky.) message was a bit less muddled Friday, as he said the President would bail out Detroit “over my dead body.”


http://personalliberty.com/2013/07/1...d-out-detroit/