The city of Detroit bankruptcy case is being played out in a courtroom far removed from the real future of the city and the destiny of its workers, retirees and residents.
Yes, the federal bankruptcy court is in downtown Detroit. But the lawyers representing the emergency-management-run city and the bankers who are trying to squeeze it dry are as far removed from the reality of average Detroiters as is the moon. The courtroom and legal process itself are meant to intimidate workers, as anyone who has observed the bankruptcy trial can attest to.
It is thus a critical development that so far some 300 city of Detroit retirees, workers and residents have made their voices heard by filing objections to the city’s austerity “Plan of Adjustment” that is being offered by Emergency Manager Kevyn Orr. This plan asks the more than 20,000 city retirees to take a 34 percent cut in their pensions if they reject the plan, or a 26 percent cut if they accept the plan.
These cuts are on top of past wage cuts, the elimination of cost-of-living adjustments, severe reductions to the annuity plans that supplement pension benefits, and major cuts to health care benefits. One union official estimated the total real cuts on the table at 70 percent.
Orr’s plan of adjustment, says the Moratorium NOW! Coalition, “will loot the pension funds to pay off the bankers. Ninety percent of the bank debt owed by the City will be paid in full. Only a small percentage of lenders will take a hit.
“At the same time, Orr wants to give $85 million to Bank of America and United Bank of Switzerland as a reward for illegal bond interest rate swaps. These banks have already stolen more than $300 million from Detroit through these swaps over the past six years.”
‘Consider our plight,’ retirees tell judge
All of the objections can be viewed online at PACER, the Public Access to Court Electronic Records, for a fee of 10 cents per page. Many are handwritten and addressed directly to Judge Steven Rhodes.
A retiree said in her objection: “I am among the many members who are under 64. The $125 a month stipend that is going on my insurance on the healthcare marketplace is not enough, nor did I qualify for any discount or tax credit, therefore I am paying a large portion, almost $500 a month, for my insurance that is coming out of my pension check.
“If the cuts are imposed,” she continued, “that is another $900 coming out of my check and that is going to bankrupt me. I worked 33 years with the city of Detroit with the promise of a pension and healthcare. Please take into consideration that you will not allow the EM to bail the city out on the backs of the retirees. It is not our fault.”
One woman worker wrote: “I would like to express how very disappointed as a City of Detroit Water and Sewerage Department employee I have been since this bankruptcy. I have taken so many cuts since working for the City of Detroit and it does affect your livelihood. They want to keep taking and taking from the employees [and] … put us through various hardships. My major concern is our annuity, which was guaranteed 7.9 percent interest and now Mr. Orr wants to take that from us. Don’t we deserve to have something to live on once we retire?”
Another retiree’s objection included: “We cannot afford to live on half of the pension we were entitled to, with insurance costs tripled with less service. We are the people who have taken concessions for the last 20 years trying to help the city survive and as we move into our twilight years we should be able at the very least to eat, but we cannot do that if the bankruptcy as presented is finalized. Please consider our plight.”
On April 1, Detroiters will rally outside the bankruptcy court and let their objections be heard in the streets. Union members, active employees, retirees, residents and community activists are expected. Some of the collected objections will be turned in to the court at that time.
The deadline for objections to the austerity plan of adjustment has been extended to April 28. They may be delivered in person or by U.S. mail to the U.S. Bankruptcy Court, Judge Steven Rhodes, c/o Clerk of the Court, 231 W. Lafayette St., Detroit, MI 48226. If done by letter, please reference case no. 13-53846 on your objection. A downloadable “People’s Objection” instructions and form can also be found at detroitdebtmoratorium.org.
An objector is not required to live or work in the city of Detroit to file. According to Moratorium NOW! organizers, the banks’ austerity plan for Detroit retirees and residents is a test case for the rest of the country and must be stopped.