Jun 9, 2014
Last week, Michigan’s state senate, Governor Snyder and Detroit’s city council all signed off on the so-called “Grand Bargain” bankruptcy deal for the city. Now pressure is being placed on city workers and retirees to accept cuts to their pensions.
The state legislature passed, and the governor signed, a package of 9 bills designating 195 million dollars to the city, while setting up a board to oversee the city’s finances for at least thirteen years. In addition, the Detroit Art Institute (DIA) and charitable groups have pledged money – spread out over twenty years. And this money may never arrive. It’s a pledge, a promise.
Within days of this deal, the city council okayed the transfer of all DIA assets–valued at BILLIONS of dollars – to a private foundation. What a bargain!
Politicians say all of these contributions – a fraction of what the pension funds are owed – somehow make it fair for general retirees to agree to cut their pensions by 4.5%. This “bargain” somehow makes it fair to get rid of future Cost of Living adjustments – meaning further cuts of several percent every year in the future as prices rise.
About 32,000 city workers and retirees received ballots in mid-May; they have until July 11 to vote on this pension proposal. They are being told that if they vote No, the whole “grand bargain” will be tossed out – and they might get their pensions cut by 27% or more.
This is blackmail!
Why should workers be robbed of even a penny from their pensions? They paid into it! THEY didn’t create Detroit’s debt in the first place! EVERY bit of their pensions should remain!
But the politicians – and the banks they REALLY represent – can’t help but slaver at the sight of 3.5 billion dollars in pension money that they want to grab hold of.
Workers and retirees are told it’s only fair to vote to cut themselves; that other “creditors” – the banks – are also taking a hit. THOSE creditors should get NOTHING. They created the financial instruments draining the city of all its resources, and continue to pocket the profits. In fact, this whole bankruptcy “grand bargain” is really designed to keep paying them, not protect the pensions. All the money pledged from the state, charities and DIA will eventually go to the banks. And if the pensioners agree to the deal, they will also be agreeing to eventually hand their pensions to the banks.
One of the bills passed last week sets up an “investment committee” to oversee the Detroit pension funds. Once that committee gets its hand on those funds, there will be no limit to how much will be swallowed by the banks. Four percent today? More and more tomorrow!
This is no bargain for the workers. This is a great big rotten package designed to convince Detroit retirees and workers to vote to screw themselves.
If they do, it will be a big game of dominoes: get Detroit workers and retirees to fall, and the capitalists, who are the ones benefitting right now in Detroit, will try to see what other groups of workers they can knock down behind them.
It’s in the interest of EVERY group of workers to keep that first domino from falling.
Absolutely, this is blackmail. And the ONLY reasonable response to blackmail is to refuse.
And then prepare to fight. Because a NO vote is only the beginning. To vote NO will change nothing, until there are people ready to lead a fight to defend that decision.