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Detroit Bankruptcy Ruling:
'Dead-Ass Wrong and Morally Corrupt'

Dec. 4, 2013 (EIRNS)—"Retirees are going to be put out of house and home. They're not going to be able to afford a car, food, or medicine," said a retired Detroit firefighter, quoted by the New York Times, in reaction to yesterday's ruling by a federal bankruptcy judge allowing the City of Detroit's emergency manager to proceed with a plan to slash pensions and healthcare benefits of retired workers.

"We'll be thrown out of our homes and starving if they seriously slash our pensions. Then they'll tell us to go to the soup lines," the AP quotes David Sole, 65, who retired from the Detroit Public Works Department in January after 22 years, and whose wife also is a city retiree.

"Pension is all we got, and now they want to cut that," Catholic Online quotes a former city worker, who pointed out that neither police officers nor firefighters are eligible for federal Social Security.

"They're going to lose their homes," Sharon L. Levine, a lawyer for AFSCME Council 25, told the New York Times. "They're going to lose medical benefits. They're not going to be able to feed their families. These are very scary issues."

"Pensions in Detroit average $19,000 a year, and there is a good possibility that they will be reduced. That is dead-ass wrong and morally corrupt," declared Lee Saunders, president of AFSCME.

On the other hand, the Wall Street-controlled major news media could scarcely contain their glee at the Detroit ruling.

A Wall Street Journal editorial titled "Detroit's Bankruptcy Breakthrough," said:

"Federal Judge Steven Rhodes removed a major obstacle to Detroit's economic revival on Tuesday by allowing the city to proceed with its bankruptcy filing. And he may have done an even larger public service for cities nationwide by ruling that the pensions of local government employees can be impaired under Chapter 9 of the federal bankruptcy code. Judge Rhodes also dismissed the union conceit that the language of Michigan's constitution protects public pensions as "contractual obligations" that cannot be "diminished or impaired" ... Judge Rhodes's wise ruling is a warning to unions and their political bodyguards that Chapter 9 is not a pension safe harbor. American public finance will be better as a result."

CNN quoted James Spiotto, a lawyer who tracks Chapter 9 bankruptcy filings:

"If you're going to hold too tightly to your constitutional right that your pension can't be touched, the court is going to prove you wrong."

The New York Times praised the ruling, which, it said, "dealt a major blow to the widely held belief that state laws preserve public pensions." It quoted Bruce Babiarz, a spokesman for the Detroit Police and Fire Retirement System, as saying:

"This is one of the strongest protected pension obligations in the country here in Michigan... If this ruling is upheld, this is the canary in a coal mine for protected pension benfits across the country. They're gone."