Detroit is going to receive an infusion of cash, courtesy of the federal government. The municipality declared bankruptcy this summer and is trying to avoid having to pay the $18 billion in liabilities it has accrued, with court battles and protests raging all the while.
Final details will be worked out in Detroit by an Obama administration delegation led by Gene Sperling, head of the White House National Economic Council, which sounds like something out of an Ayn Rand novel. Also attending were Attorney General Eric Holder, Secretary of Housing and Urban Development Shaun Donovan, and Secretary of Transportation Anthony Foxx. The ostensible purpose of the meeting is not to talk about bailouts (which aren't happening, everyone insists) but rather to discuss plans to "lift up" Detroit, "to expand opportunity and renew this world-class city."
The lifting will be accomplished by an injection of around $300 million, mostly footed by the taxpayer. The New York Times reports:
About $140 million would go toward transit improvements, including $24 million to repair buses. An additional $100 million would go to blight efforts, including $25 million for commercial demolitions from combined federal, state and foundation money. With the planned $25 million in federal Homeland Security money, up to 150 firefighters could be hired.
For their part, the people of Detroit are grateful. The spokesman for the city's emergency manager was quoted as responding to the plans for a non-bailout by saying "Money we don't have to find somewhere else helps. It is better than nothing. We'll take it gladly." And there is already talk about more non-bailouts in the future! The Times quotes Michigan U.S. Senator Debbie Stabenow: “What is important is that this is not a one-time announcement. This is the first step.”
In the meantime, the Detroit City Council is trying to get the city through, wracking it collective brains to conjure up solutions as novel as using goats to trim the overgrown grass. This city is clearly in good hands.
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