Detroit bankruptcy: Is it a warning sign for America? (+video)
How Michigan Gov. Rick Snyder has dealt with financial crises in the state – and how he will handle the Detroit bankruptcy – could hold lessons for the rest of the US.
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"I've tried everything in the book to get [the legislature's] attention," Quinn said in a press conference earlier this month. "It's time for the legislature to legislate."Skip to next paragraph
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In Michigan, Snyder has had the support of a Republican Legislature, but some of his reforms have rankled his own party. Earlier this year, five Republican senators introduced legislation to repeal a Snyder-backed tax on retiree pensions. And Senate Republicans adjourned this month without taking up Snyder's call to expand Medicaid to 320,000 low-income residents.
As governor, Snyder has also signed bills that force public employees to pay a greater share of their health insurance and that have ended retiree health care entirely for two-thirds of current Michigan legislators and all future legislators.
"This is an exceedingly generous benefit that is clearly out-of-step with the private sector," Snyder said upon signing the bill in 2011, according to the Associated Press.
Understandably, state employees have not been thrilled. Responding to the prospect of state employees having to pay 20 percent of their own health care costs, the state's largest teachers union told the AP in 2011: "The real losers in the debate continue to be the employees who just got a greater burden of health care costs shifted onto their backs."
The uproar in Detroit is likely to dwarf anything Snyder has had to deal with so far. There is talk of pensioners getting only 10 cents for each dollar they have been promised.
But Snyder said he is prepared.
"We went through all the other processes you could," Snyder said on "Meet the Press." "There were no other viable options and once you go through every other option, then you should consider bankruptcy. We're at that point."
And his focus, as always, appears to be on the future. When Republican state Sen. Rick Jones called the retiree pension tax "extremely unfair" for people who have "planned their life for their retirement and then suddenly, in the midst of their retirement,... get a new tax," the businessman Snyder had a ready response.
The new tax "is fair to our young people," he said earlier this year. "We were [using] a tax system that was driving young people to leave our state."
Likewise, as Snyder looks to make his state's signature city a symbol of something more than economic fraud and collapse, he appears to be looking beyond the thicket of political wranglings and lawsuits that lie ahead.
"There’s many outstanding things going on in the city with the private sector, with young people moving in the city, it's got great opportunity," he said on "Meet the Press." "The last major obstacle is the city government."
Now, Snyder is jumping in head-first, and other states with cities in similar – though less dire – straits are watching, Eric Scorsone, a Michigan State University economist, told AP.
"It's aggressive in the sense that most states don't intervene in local affairs to the same extent."
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