Daily Kos: Detroit bankruptcy judge gives the go-ahead to pension theft and elder poverty

Daily Kos: Detroit bankruptcy judge gives the go-ahead to pension theft and elder poverty

There's a lot of competition for scariest economic trend, but attacks on pensions of long-time public workers are in the running. You take people who've worked for years, planning their retirements around a pension, pensions that in many cases replace Social Security—and then, late in the game, you cut or eliminate those pensions. Talk about a recipe for elder poverty. But thanks to a judge's decision that the pensions of Detroit public workers are on the table in the city's bankruptcy, this could be the wave of the future:

The ruling by Judge Steven W. Rhodes, who is presiding in Detroit’s bankruptcy case, that public pensions are not protected from cuts could alter the course of bankrupt cities like Stockton and San Bernardino, Calif., that had been operating under the assumption that pensions were untouchable.

Stockton’s bankruptcy case, for instance, is further along than Detroit’s, and until Tuesday it seemed likely to leave public pensions fully intact.

So what happens when you leave retired people without the retirement income they'd based their financial plans on? People are going to lose their homes. They're going to be forced onto government assistance because the money they earned as deferred wages over years has been taken from them. And this now sets the precedent that the promise of pensions as deferred wages, even given the strongest contract, is worthless. For everyone who thought they had it:

Bruce Babiarz, a spokesman for the Detroit Police and Fire Retirement System, was blunt in his assessment. “This is one of the strongest protected pension obligations in the country here in Michigan,” he said. “If this ruling is upheld, this is the canary in a coal mine for protected pension benefits across the country. They’re gone.” Meanwhile, in Illinois, the state legislature passed a bill cutting public pensions.

In Detroit—where the debt crisis is being seriously exaggerated to begin with—what this means is that a city suffering in part from unemployment and poverty is about to be hit with more poverty. Nationwide, every public worker has to know that their contracts have been declared worthless and their pensions fair game. It's a logical extension of three or four decades of corporations and politicians chipping away at workers' ability and right to make a decent living, but it's a terrifying threshold to cross in that long war.

Detroit's cash-strapped firefighters take on arson epidemic | Al Jazeera America

Detroit's cash-strapped firefighters take on arson epidemic | Al Jazeera America



Michael Jefferson has been putting out fires in Detroit for two decades. But he can only watch and wait as the city he loves burns around him.

On Tuesday, Detroit became the largest American city to ever qualify for bankruptcy protection. In the most controversial piece of the decision, Judge Steven W. Rhodes of the U.S. Bankruptcy Court ruled that retirees’ pension checks could be cut during a bankruptcy proceeding.
>br/> “You know people work to live comfortably the rest of their lives,” Jefferson, the captain of Engine Company 44, told America Tonight. “You put in 20, 25 years, you expect to be taken care of when you retire.”

Derek Foxhall, Engine Company 44's engine operator and a 15-year veteran of the Detroit Fire Department, calculated that a firefighter with a $30,000 annual pension could see it slashed to just $4,800 with the city in bankruptcy.

“This is a career. You know, you came on this job knowing that at the end of the tunnel there was a light,” he said. “Well, they just turned the light off and said, ‘hey, you find your way out.’ They left us in the dark.”

Why is Google Funding Grover Norquist, Heritage Action and ALEC? | Alternet

Why is Google Funding Grover Norquist, Heritage Action and ALEC? | Alternet

December 5, 2013 | Google, the tech giant supposedly guided by its “don’t be evil” motto, has been funding a growing list of groups advancing the agenda of the Koch brothers.

Organizations that received “substantial” funding from Google for the first time over the past year include Grover Norquist's Americans for Tax Reform, the Federalist Society, the American Conservative Union (best known for its CPAC conference), and the political arm of the Heritage Foundation that led the charge to shut down the government over the Affordable Care Act: Heritage Action.

In 2013, Google also funded the corporate lobby group, the American Legislative Exchange Council, although that group is not listed as receiving “substantial” funding in the list published by Google.

U.S. corporations are not required to publicly disclose their funding of political advocacy groups, and very few do so, but since at least 2010 Google has chosen to voluntarily release some limited details about grants it makes to U.S. non-profits. The published list from Google is not comprehensive, including only those groups that “receive the most substantial contributions from Google’s U.S. Federal Public Policy and Government Affairs team.”

What Google considers “substantial” is not explained -- no dollar amounts are given -- but the language suggests significant investments from Google and, with a stock value of $330 billion, Google has considerably deep pockets.

Google has a distinctively progressive image, but in March 2012 it hired former Republican member of the House of Representatives, Susan Molinari as its Vice President of Public Policy and Government Relations. According to the New York Times, Molinari is being “paid handsomely to broaden the tech giant’s support beyond Silicon Valley Democrats and to lavish money and attention on selected Republicans.”

New "Substantial" Right-Wing Google Grants in Past Year

CMD examined the information released by Google for the years 2010 to 2013. The voluntary disclosures indicate that the following groups are either new grantees of Google since September 2012, or have been listed as having received a “substantial” Google grant for the first time:

American Conservative Union Americans for Tax Reform CATO Institute Federalist Society George Mason University Law School Law and Economics Center Heritage Action Mercatus Center National Taxpayers Union R Street Institute Texas Public Policy Foundation Detailed information on each of these groups can be found at CMD’s Sourcewatch website.

Google Funding for Anti-Government Groups

Heritage Action, the tea-party styled political advocacy arm of the Heritage Foundation, is perhaps the most surprising recipient of Google’s largesse.

More than any other group working to repeal the Affordable Care Act, Heritage Action pushed for a sustained government shutdown in the fall of 2013, taking the country to the brink of a potentially catastrophic debt default.

Laying the ground for that strategy, Heritage Action helda nine-city “Defund Obamacare Town Hall Tour” in August 2013, providing a platform for Texas Senator Ted Cruz to address crowds of cheering tea party supporters.

For Cruz, increasingly spoken of as a 2016 Presidential candidate, the government shutdown helped raise his profile and build his supporter -- and donor -- base.

Notably, Heritage Action received $500,000 from the Koch-funded and Koch-operative staffed Freedom Partners in 2012. It is not yet known how much Heritage Action received in 2013 from sources other than Google.

Political, economic divisions remain after Detroit bankruptcy ruling - latimes.com

Political, economic divisions remain after Detroit bankruptcy ruling - latimes.com



Detroit Mayor Dave Bing says there is "going to be a lot of pain" for people following a judge's ruling that the city is eligible to fix its finances in bankruptcy court.

By Michael Musk December 3, 2013, 1:03 p.m.

After a federal judge ruled that Detroit was eligible for bankruptcy protection and cleared the way for municipal pensions to be cut, city officials were upbeat, called for unity and urged people to look ahead with optimism. But for the unions, whose members, current and retired, are likely to face benefit reductions, the decision signaled the next legal round. The disparate reactions were symptomatic of what lies ahead for Detroit as it officially enters United States Bankruptcy Court. The political differences between the city and its the unions have not gone away, nor has the economic reality of trying to reduce about $18 billion in debt by deciding how to apportion the pain from the cuts.

Also Detroit 'needs help,' is eligible for bankruptcy, judge rules Detroit 'needs help,' is eligible for bankruptcy, judge rules Gov. Snyder says he 'worked diligently' to avoid Detroit bankruptcy Gov. Snyder says he 'worked diligently' to avoid Detroit bankruptcy The hard question for Detroit bankruptcy judge is not about debt The hard question for Detroit bankruptcy judge is not about debt

In his decision Tuesday, U.S. Bankruptcy Judge Steven W. Rhodes found that Detroit, once the nation’s fourth-largest city, was insolvent and was allowed to enter Chapter 9 bankruptcy protection, making it the largest U.S. city to do so. He also ruled that the pension checks of retirees could be reduced during the bankruptcy proceedings.

“This once-proud and prosperous city cannot pay its debts. It is insolvent. It’s eligible for bankruptcy,” Rhodes said. “But it also has an opportunity for a fresh start.”

Under Kevyn Orr, the state-appointed emergency manager, the city will introduce its proposal to restructure its debt and reshape government services and operations. It will file a plan of adjustment within weeks and a disclosure statement with more details early next year. The goal is for Detroit to exit bankruptcy protection by the end of September.

“I would ask creditors and our labor partners to come forward and work with us to get at the sorely needed reform this city has got to achieve,” Orr said during a televised news conference. “Hopefully we can present a consensual plan of adjustment.” “This eligibility ruling is a start for us. It is an overture, an opportunity to work together,” he said. “Let’s come together, work together and get this done.” The conflicts among the unions and other creditors are sharp, however.

“We’re disappointed by the ruling,” Sharon Levine, an attorney for the American Federation of State, County and Municipal Employees, which represents half the city's workers, said in a telephone interview with the Los Angeles Times. The unions maintain that the state constitution protects pensions from being cut, an issue that could end up being decided by the U.S. Supreme Court.

In his ruling, Rhodes said Michigan’s protections “do not apply to the federal Bankruptcy Court,” adding that pensions are not entitled to “any extraordinary attention” compared with other debts. He said the court would not “lightly or casually exercise the power to impair pensions,” but he was clear that the court would allow cuts. Atty. Gen. Bill Schuette said he disagreed with that part of the decision.

“We’ve tried hard to negotiate," Levine said, adding that Orr had not been willing to bargain in good faith. Levine said she had already sought permission to take the case directly to the 6th Circuit Court of Appeals in Cincinnati because time is of the essence and there is no stay of the bankruptcy ruling while the appeal is underway.

“Our members and retirees remain concerned about their pensions and jobs,” she said. The Detroit firefighters union also said that it would fight to save the pensions of its retired members as well as firefighter jobs that could be lost in the reorganization.

Time is important, said Nathan Resnick, a Detroit bankruptcy lawyer, who is not involved in the case. “The overall umbrella issue here, if we look at the way in which Judge Rhodes played his cards, is that he wants the whole case expedited,” Resnick said. “He wants to move it. He wants to move it fast. He doesn’t want it to languish, either in front of him or the appellate court.” Resnick said Rhodes stayed focused on the big picture.

“It isn’t that he’s unsympathetic to a company going out of business,” Resnick said. “But because he’s a veteran judge and he's heard those stories many times, he also has a key awareness that what may seem horrendous to all those folks in the moment is not really the big picture. The big picture is should the city reorganize and does it need to be reorganized and what does that mean in the future and who will benefit in the long run.

“The pensioners, the sympathy runs deep for them, no doubt,” he said. “But the fact remains -- you see in all bankruptcy cases -- where’s the money going to come from?” “We're trying to be very thoughtful, measured and humane,” Orr said. “The reality is that there is not enough money to address the situation no matter what we do.” Mayor Dave Bing, who did not seek reelection and whose terms expires at the end of the year, said the ruling would be beneficial in the long run. “There's going to be a lot of pain for a lot of different people,“ he told reporters. “But in the long run, the future will be bright. “Now the hard work starts,” he said.