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-- Detroit is now the largest city in US history to file for bankruptcy but our other cities far behind economists have been warning the cities around the nation to reform.
Their pension programs but officials keep on making promises to the unions that they just can't keep.
So who's next Chicago Philadelphia Oakland California.
Joining me from the Bay Area from is the Sampras -- the public defender Jeff -- and Jeff we met a number of years ago when you.
Were pounding your fist on the table in San Francisco's and we need to reform pensions.
And it went to a vote and you lost people said no we want to keep on making these promises to these people.
So does the Detroit story help you in your efforts to reform pensions.
Yes -- -- -- things that we warned -- folks about is that cities would go bankrupt -- problem was dealt with.
In the case in Detroit they are eighteen billion dollars eighteen billion dollars in debt.
And half of that actually over half of that about ten billion dollars is because they don't have enough money to pay their pension obligations to their.
Employees as well as health care cost.
In virtually every American city county and Steve.
Faces this problem that they don't have sufficient funding to pay -- pension obligations.
And health care cost so this is a situation.
Which threatens every city in it and -- and that's the do warning shot here that people have to see.
With what's happening in Detroit.
Did it's it's a it's a reality check there's no question about it in and I know you're out of bankruptcy lawyer but are you are lawyers so how do you think this is going to play out because in California with.
San Bernardino and Stockton.
Right in bankruptcy.
And I know that California public employees retirement system is saying pay -- first.
The judges saying yeah there's a state constitutional requirement you pay the pensions first but the federal bankruptcy judge said.
No way you're just another one of the creditors how do you think -- is gonna play out as far as.
The ranking of the probably that the pension.
We're -- always looking to see what happens in Detroit most states including California.
Held a provision in the constitution that says hands off pensions you can't change.
He pension contract.
And in the reality is is that.
If cities counties -- paid that'd be the amounts of the old hundred pensions then ultimately.
You know the taxpayers.
And -- when he ran the money they have to go to bankruptcy court nobody go to bankruptcy court you're restructuring your -- he's saying I don't have the money to pay.
-- my creditors in the case of Detroit.
They have over 100000.
Creditors with the largest creditor.
Is going to be the pensioners.
And the retired employees of the the old neither of these obligations to.
And sell -- fact of the matter is is that if you can't pay.
Then the only choice that you have as a city is to go into bankruptcy court in what happened this week is a federal judge.
Allow the keys to go forward.
In bankruptcy case in other words.
-- -- the state because there are excited this city is gonna be -- able to invoke the protections of the bankruptcy.
Law and -- this was a historic.
-- decision in the sense that.
That -- the federal judge said you know what we're gonna treat this as a bankruptcy going forward he hasn't made decisions as to.
You know how the various creditors are gonna be treated.
But certainly this is something different Q and what we saw from the Michigan state courts.
You're you're concerned about your city and you went to the people San Francisco and they said keep paying those pensions were not gonna Moroccan or do when he sort of reform.
What are you gonna do now -- are you going to try to bring this issue back up again and saved -- Look at the -- Yeah I mean I I think people are starting to understand it -- -- when -- working on.
The spiritual -- again I would progressive Democrat alike coming at this saying.
-- let's cut pensions is for the sake of cutting -- what I saw.
Was basic services being cut.
And our city not being able to find things like education the other basic things in government is supposed to provide because you're spending so much of -- money.
On pensions and in health care costs in the so that's where I was coming from.
But I think in the case -- certainly stronger we have now he cities.
This in the past three years that have declared bankruptcy as you mention December new deal.
In Stockton here we also had taleo declare bankruptcy about five years -- -- these.
Our real cities that can't pay their obligations and I think -- that we're gonna see more of these notion as Chicago.
Has -- slow like Rhode Island or right on the break.
And so as people become more aware.
How far reaching this problem is I think that content people will start peaking.
Pension reforms seriously is looking.
And new -- is this is a problem -- it is solvable.
But it means that we're not -- -- -- afford to pay.
You know 300000.
Dollar -- remember.
The tensions were created.
Is just one part of retirement here who wasn't intended as.
Used it to be a full salary did and didn't many.
People that's -- that's that -- pensions that have become.
Will you make a very good point this may now you know people have heard about the bogey man then maybe they thought it was all made up but this time it's real and Detroit and probably will be real and other cities -- -- -- always good.
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