July 29--Michigan Attorney General Bill Schuette formally jumped into Detroit's federal bankruptcy case today on behalf of thousands of retirees who fear losing their pensions as the city struggles to climb out of debt.
In a three-page filing in U.S. Bankruptcy Court, Schuette invoked his role as the attorney of the people and the defender of the Michigan Constitution -- a position that puts the conservative Republican in a delicate balancing act.
On the one hand, Schuette is working to protect what he calls "hard-earned pensions" from getting swallowed by the bankruptcy. On the other, his office still has to represent Gov. Rick Snyder, who officially signed off on the bankruptcy and has fought to make sure it proceeds.
And it was Schuette's office that just weeks ago defended Snyder and the bankruptcy filing in state court, successfully blocking efforts by pensioners to halt the bankruptcy proceedings.
Still, Schuette believes he can protection pensions by upholding the Michigan Constitution.
"Hardworking people, like cops and firefighters who put their lives on the line, struggle on a fixed income, and now could face a financial crisis through no fault of their own," Schuette said in a statement today. "The Michigan Constitution is crystal clear on this. Article 9 Section 24 says pensions may not be impaired, and I will fight to defend the Constitution and the citizens it protects."
Detroit's Emergency Manager Kevyn Orr has said the city doesn't have money to pay $3.5 billion in underfunding in the two plans that provide retirement pay to about 20,000 people. Schuette noted that while Orr has not detailed the type of cuts he intends to seek from Detroit's two pension plans, he will fight to protect them.
"Retirees may face a potential financial crisis not of their own making, possibly a result of pension fund mismanagement," Schuette has stated previously.
Schuette said he plans to U.S. Bankruptcy Judge Steven Rhodes, who is overseeing the case, that "Michigan residents live under a constitution that protects hard-earned pensions." He noted that no court action has begun specifically related to pensions, but by intervening on behalf of the pensioners, he "will be able to defend the state constitution if and when this does occur."
Copyright 2013 - Detroit Free Press
