Obama administration gives Detroit $100 million for 'blight removal'

The cash infusion by the federal government is actually going to help the city pay pensions, even though they're playing a kind of shell game with the money.

As for "blight removal," perhaps they could start with city hall.


Michigan officials and President Barack Obama's Administration are discussing a plan to free up $100 million in federal money to aid Detroit's retired city workers, the Detroit Free Press reported on Tuesday.

Citing two people familiar with the talks, the newspaper said the talks were centered around federal money flowing to Michigan for blight removal. Under the plan, $100 million would be earmarked for Detroit, reducing the $500 million the city's emergency manager, Kevyn Orr, plans to use to eliminate blight over the next 10 years.

The $100 million saved could then be used by Orr to ease pension cuts for retirees under the city's plan to adjust its $18 billion of debt and exit the biggest municipal bankruptcy in U.S. history, according to the report.

A spokeswoman for Michigan Governor Rick Snyder declined to comment on the report. Orr's spokesman did not immediately respond to a request for comment. The Free Press said the White House would not comment late Tuesday.

Snyder has asked the state legislature to allocate $350 million in settlement money that the state receives for Detroit from U.S. tobacco companies over 20 years. That money along with funds pledged by philanthropic foundations and the Detroit Institute of Arts, would raise about $815 million for the city's retirees and eliminate the possibility of a fire sale of art works in the city's bankruptcy.

The White House wants the story to go away because even among Democrats on Capitol Hill, there is little enthusiasm for any kind of bailout for the Motor City. That goes double for Governor Snyder who is locked in a close re-election campaign. 

It seems inevitable that some kind of federal bailout package for Detroit will be proposed. City manager Orr is keeing things together with bailing wire and bee's wax, with little margin for error. To truly get out from under, the city is going to need billions.

Nothing will be proposed this election year, but 2015 may be a different story.


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