Meet the Press   |  July 21, 2013

2: Rick Snyder breaks down Detroit bankruptcy status

Michigan Gov. Rick Snyder visits Meet the Press to discuss the city of Detroit's recent filing for bankruptcy.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> our political roundtable is here. i'll talk to them in just a moment. but i want to begin with michigan governor rick snyder . filing of bankruptcy by detroit is such a big story . i was immediately drawn to something you said back in june to 11. i'll put it up on the screen. the headline, "bankruptcy not an option for cities." governor snyder said that he won't let detroit or any other michigan cities declare bankruptcy. detroit 's not going into bankruptcy. snyder told reporters, we're going to work hard to make sure that we don't need an emergency manager and bankruptcy shouldn't be on the table. so what happened?

>> well, we worked hard on the process. again, that's something to be avoided. and it's not something i'm happy to be in this situation. this was a very tough decision. but it's the right decision. because ultimately the issue we need to do is to get better services for the 700,000 people of detroit . the citizens of detroit deserve better than they're getting today, in addition to dealing with this crushing debt question. we went through all the other processes we could. there were no other viable options. and once you go through every other option, then you should consider bankruptcy. we're at that point. i believe it's the right thing to do now because the focus needs to be dealing with this debt question. but even more importantly, david , the citizens of detroit deserve better services. 58-minute response times on police calls. absolutely unacceptable.

>> 58 minutes, average response time for high-priority calls. 50% of the park s closed since 2008 . 40% of the streetlights don't work. how do politicians let the motor city down?

>> again, if you look, this is 60 years of decline. this has been kicking the can down the road for 6 of 0 years. and my perspective on it, enough is enough. i think there needs to be more accountability in government. and part of the issue here is let's stand up with and deal with this tragic situation and take care of the citizens. and that's what this is all about. this is drawing that line to say let's stop going downhill. because if we hadn't declared bankruptcy, every continuing day, detroit would have gone farther downhill. this is an opportunity to stabilize detroit . and even more importantly, longer term, i'm very bullish about the growth opportunities of detroit . there's many outstanding things going on in the city with the private sector, with young people moving in the city, it's got great opportunity. the last major obstacle is the city government .

>> you've got $18 billion in debt. a friend of mine i talked to said, you know, is this america ? look what's happened. how do you recover? you've got some 20,000 retirees there who rely upon pension checks which is grossly underfunded. how do you find a way back? how does a city like this turn itself around?

>> well, you get honest about it to start with. again, that's about accountability and putting the fangts on the table. that's been a big part of this exercise is in many cases for the on years, we've ignored the facts. and the retirees, i empathize with them.

>> can you possibly make good on all those commitments, major retirees?

>> let me put it in perspective for you. one of the things that bankruptcy does allow is a positive in the sense that we were talking with a lot of creditors. but one of the issues that weren't being represented well enough were the retirees. so proactively in the bankruptcy petition, one thing that we're asking for is the judge, right up front, to appoint someone to represent the retirees. they need to be at the table. they need to have a voice. and the other thing i want to really speak to the retirees themselves now is to the degree the pension plans are funded, that doesn't affect us at all. the bankruptcy is about the unfunded portion of the pension liability, which is still significant. i don't want to underestimate it, but the funded piece is safe. the real question is how do you address the unfunded piece. and if you go back in history, it's an ugly history of how this pension fund was managed.

>> as is the case in a lot of different cities. the role of federal government is an obvious question because the federal government has intervened when the auto companies needed a big bailout. you go back to the 1970s and that famous headline in the "new york daily news" when new york

was in trouble, "ford to city: drop dead." here are some of the facts about the auto bailout and about the current debt detroit has. you had 80 plus billion dollars that flowed to the auto companies when they needed help. now you've got a total debt in detroit of $18 billion. is there not some money that should be available even from that initial bailout to the auto companies to help the city?

>> i'm not going to speak to the federal government . what i want to speak to is a solution, an idea of being a partner in solving problems. tangible things we're doing. this isn't about just writing checks. this is about improving detroit . one thing i'm proud of, we're partnering with the federal government , the city and the state working together is blight removal. we're going to be starting to implement $100 million program to remove some of those 78,000 blighted structures in detroit hopefully within the next 30 days . that's one of the positive steps. so we don't need to wait for all of bankruptcy to end. we're moving now to improving detroit and getting better services for those great people.

>> governor, we'll be watching. thank you very much for your time here with us today. as i'm going to make my way over to our roundtable, we will hear from, among others, the former governor of michigan , democrat jennifer granholm . i want to consider and try to understand the way politicians speak about detroit . how they've always done it. consider this. from president obama from october of last year.

>> we refuse to throw in the towel and do nothing. we refuse to let detroit go bankrupt. i bet on american workers and american ingenuity and three years later, that bet is paying off in a big way.

>> and good morning to all of you. governor granholm , when the president speaks about detroit , he doesn't mean the city of detroit .

>> right.

>> he means the auto companies. they got better. detroit did not.

>> right. and that's a really important distinction because people are assuming that when he said we're not going to let detroit go bankrupt, that he meant detroit , the city. it's two different entities. but the city of detroit is the poster child for the deindustrialization of america , david . since 1950 , which was the heyday of detroit 's burgeoning auto industry , there were three -- almost 300,000 automotive or manufacturing jobs in the city. 300,000. today, it's 27,000. that's a 90% decline in good-paying manufacturing jobs. so the real question is, not just about tearing down blight. it's what are we going to do as a nation to create good-paying, middle- class jobs in a country that has a policy of being completely hands off with the economy. we have to have a manufacturing policy, an advanced manufacturing policy, and give the ability for states to develop clusters that will help them compete.

>> some of the criticism, governor, from conservatives who say, look, you've had 50 years of democratic rule in the city of detroit . you've had unions, not only in detroit , but in other cities who are pursuing pensions and retirement policies that are completely unsustainable. and that there has been some level of denial. even you, in 2009 , "time" magazine interviewed you. and the question was, will detroit ever really recover in your honest opinion? you said absolutely. we have great bones in the city and as a state, we have more engineers in this region than in all the other states plus canada and mexico combined. we're in a tough period because we have an auto crisis and a financial crisis so we're hit harder than any other state in the country. today you're saying it's much bigger than the financial crisis that happened in this country.

>> it is bigger. my whole point is that detroit does have great bones, but what we need is a strategy nationally, like other countries have, to keep and create good-paying, middle- class jobs here. and we need a congress that would support that strategy. let me just quickly say, david , you talked about the pensions. cities across the couldnntry have $2 million of unfended pensions. this is not just detroit . there are 50,000 communities across the country that have lost factories since the year 2000 . this is not a democratic problem. this is a problem across the country.

>> chuck todd , who let detroit down? which politicians let them down?

>> i think there was poor governance in detroit for a very long time. this turned into a machine political town, if you followed that. in my 25 years of following politics, you know, it was a city -- and i remember the first reform movement of detroit , when dennis archer got elected mayor , sort of when they replaced in the coal man young era, it was that first attempt. and there was a lot of cities that did that. you saw here in washington, d.c., and you saw these attempts. you know, one mayor couldn't change things because you had 30 years of cronyism. it was a machine.

>> but if i told you -- i'm sorry, if i told you that a city on the border of america 's largest trading partner couldn't figure out how to diversify its economy, you have to sit there and say it was not just poor city government , poor business leadership, poor governance -- it is sort of remarkable that detroit , where it's located, it ended up in this position.

>> you know, the bigger issue here because this detroit -- and what the governor has mentioned, and other communities and other urban cities is the result also of public policies at the national level when it comes to trade, when it comes to the fair investment and manufacturing to watch all of our jobs go abroad and not have a response. the second thing that grates many, many people is that we could bail out the automobile companies at a very hefty price. we could bail out the banks at a very hefty price. but when it comes to urban communities, where the poor are, when it comes to the deteriorating construction of urban communities, we have excuses. we have an effort to simply say, well, the problems are in city hall . get your government straight, and then we'll help you. what i hope this means is that there's going to be a renewed interest in american urban communities. and for the national government to recognize we need a concerted effort if we're going to compete with china and india to bring back good-paying jobs.

>> is that a fair comparison, though? i made it with governor snyder about the bailout and detroit .

>> listen, we've got two narratives. the one is deindustrialization. the other is institutional failure. deindustrialization didn't only happen in detroit . it happened in san francisco and most other places.

>> pittsburgh.

>> pittsburgh, really, probably the best parallel because they had economic diversity. they had education. and they did not have institutional failure. detroit , to me, is decline 101. whether it's the roman empire , british empire , spanish empire , entrenched interests. they're together forever and forever. they get a culture of mediocrity, cronyism and collapse.

>> you think about major institutions, whether washington is broken, schools, cities. george packer , we discussed the book he's written called "the unwinding and inner history of the new america ." and he writes this, in part. no one can say when the unwinding began, when the coil that held americans together in its secure and sometimes stifling grip first gave way. like any great change, the unwinding began countless times, countless ways and at some moment the country always the same country crossed a lane and became different. if you were born around 1960 or afterward, you would spend your adult life in the vertigo of that unwinding. you watched structures that had been in place before your birth collapse like pillars of salt across the vast visible landscape. you think a lot about this concept of whether this is american decline or if this is something much more temporary and narrow.

>> these are -- it's not american decline. it's class . we've had a lot of discussion about race on the show today. to me the class divide is bigger than the race divide. if you're in the educated class , college-educated communities, you're not seeing decline. you've got family structures, rising incomes, you're doing fine. if you're in the less educated, whether you're african-american, latino, white, asian, you're seeing collapsing social skrurkts. 70% african-american kids born out of wedlock. so what you're seeing is this collapse of order on the bottom. if you're born into a certain class , there are certain railroad tracks , you just go along the tracks.

>> you know what, david ? that's inconsistent with what the 20th century was about. because what the 20th century was about was the rise of the middle class . and the opening of doors of economic opportunity. and i think that the class divide combined with the race divide is america 's greatest 21st century challenge because what's changed is the world in which we live. the world in which we live with new competitors all across the globe. and we're in the changing dem graph demographics of america . we've had substantial progress in the 20th century when it came to closing the class divide. we've departed from that. and what i'm concerned is that we, in many, many polite circles, do not think that that class divide is a challenge to americans' economic competitiveness.

>> and governor, my mother, born in detroit , grew up at a time when a middle- class job in detroit was possible, that you could really think about sustaining a family on.

>> well, that's the whole point. is what is -- if we want congress to act on anything, it is on a strategy to keep and create middle- class jobs in america . you're right. but we are seeing the rich get richer and the poor get poorer and that large scope of poor, the group is getting larger. so how do we create, in a global economy , middle- class jobs in america ? other countries are doing this. we have not. we can learn from germany. we think that because we are exceptional as a nation, that we ought not be borrowing best practices from other countries. but in fact, the other countries have figured out how to crack the code, to create advanced manufacturing jobs in their nation. why can't we? it's because we have gridlock in congress that refuses to have any hands on when it comes to the economy.

>> let me get a break break in here and come back. i want to get to the president and his comments on race. where he's choosing to really make an impact in his second term