Koch brothers and AFP say no to state bailout of Detroit

Billionaires Charles and David Koch are on a mission. They are working with the state chapter of Americans for Prosperity (AFP) to stop the state of Michigan from providing $195 million in aid to Detroit. If successful the move could slow Detroit’s exit from the largest municipal bankruptcy case in years and force retirees to take deeper cuts on their pensions. Artwork in the city of Detroit may also have to be sold.

English: City seal of Detroit, Michigan.

Goal of the Koch brothers

 

The Americans for Prosperity and the Koch brothers have a strong message that Detroit and other cities around the country need to hear- it’s time for politicians to change their behavior, stop promising money to workers they do not have, and stop expecting the American taxpayer to bail them out when they run out of money.

The Koch brothers believes it’s better for the city of Detroit to be forced to sell their assets and require retirees to move to 401k plans instead of a traditional defined benefit pension plan, a move that thousands of retirees in the private sector were forced to do more than ten to twenty years ago.

Part of the campaign to influence state legislatures began early this week with Americans for Prosperity (AFP) and Koch brothers encouraging people to write to their state legislatures and tell them not to provide the money.

The AFP and the Koch brothers may be fighting an uphill battle. Not only is the Republican-controlled Michigan legislature pushing to provide aid to the city, the Republican Governor Rick Snyder is also offering support. “This is a settlement. This not a bailout,” said Snyder. “And I want to be very, very clear about that.”

Snyder believes that the settlement offer will allow Michigan to avoid what he considers a future possibility that the state could be “on the hook for billions in benefits promised by Detroit’s underfunded pension plans.”

Pensioners could force city into expensive bankruptcy litigation

 

What happens if the negotiated settlement is not successful? It’s likely pensioners will file lawsuits and Detroit’s bankruptcy could be costly and drawn out, a move many in the state legislature want to avoid.

Jase Bolger, speaker of the Michigan House, noted, “Drawn-out bankruptcy litigation would have dire consequences for Michigan taxpayers, from years of costly, prolonged lawsuits to uncertainty on the part of investors and job providers.”

The Koch brothers have a powerful voice in conservative politics. This year alone they will spend an estimated $125 million in this year’s mid-term congressional, state and local elections. They are taking their message for a smaller government to the people through television, radio and billboard ads.

While many in the public seem oblivious to what is happening in Detroit and other cities throughout the United States, others have become proactive and want state and federal legislatures to be accountable, which means they stop spending our money with impunity.

Detroit Emergency Manager Kevyn Orr has not commented on the Koch brothers’ efforts to stop Michigan’s aid to Detroit, but others close to the process believe it will be approved despite firm opposition from the far left and far right.

Recent article:

Bankruptcy repayment plan for Detroit to be reviewed in Court

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Beth

Beth L. is a content writer for Better Bankruptcy. Good content and information is one of many methods we utilize to bring you the answers you need.