The emergency manager appointed to fix Detroit’s unprecedented financial problems put the blame Sunday squarely on the city and defended his decision to file for bankruptcy, saying he had no other choice despite its impact on city pensioners.
“This is the only way,” emergency manager Kevyn Orr told “Fox News Sunday.” “We were compelled to file for bankruptcy.”
Orr steadfastly stuck to what he said was his appointed mission of getting Detroit out from under $19 billion in debt, declining to speculate on whether or if the federal government should bail out the city, once the worldwide hub of auto manufacturing.
He said his goal was to restructure the debt, including roughly $3.5 million in underfunded pension liabilities, and to get Detroit on its feet again by fall 2014.
Orr, appointed in March by Republican Gov. Rick Synder, also said he has appealed a judge’s decision Friday that the bankruptcy violates Michigan’s constitution, which protects government employee’s pensions.
He also said that his plan would extend full payments only to pensioners for the next six months and acknowledge the hardship it will cause.
“My mother is a pensioner,” Orr said.
Still, he said Detroit “dug this whole,” in part by not addressing its problems earlier.
With a population of 1.8 million in the 1950s, Detroit’s slow decline started with residents migrating to the suburbs in the 1960s and was accelerated by automakers leaving Detroit, which diminished the city’s tax base and made it difficult for officials to provide basic services such as law enforcement and police protection.
The filing Thursday makes the city the largest in the United States to file for bankruptcy.
Orr also defended criticism from the financial sector, saying potential investors will look at an improved Detroit, not the old one.
I remember when people said “nobody will ever buy a car from a bankrupt automaker,” Orr said.