DETROIT - No Bailout Thanks to Anal-Retentive Republicans

Republicans, tax breaks for the rich but nothing for anyone else.

"$300 Million in Detroit Aid, but No Bailout" by JACKIE CALMES, New York Times 9/26/2013

Excerpt

Two months after Detroit became the largest city ever to file for bankruptcy, top Obama administration officials will be there on Friday to propose nearly $300 million in combined federal and private aid toward a Motown comeback — only a fraction of the billions the city owes and a reflection of the budget and political limits on President Obama.

This first major infusion from the federal government, which administration officials say will not be the last, would be used to help clear and redevelop blighted properties, improve transportation systems, bolster the police — especially around schools — and overhaul city management systems wrecked by years of poor administration and inadequate resources.

The package follows weeks of meetings in Detroit and at the White House between the administration team and local business, labor and philanthropic leaders on how best to pool existing resources.  Final details are to be worked out in a two-hour meeting of the federal and local officials at Wayne State University, participants said.

While Mr. Obama remains in Washington as fights over the budget and health care threaten a government shutdown at the start of a fiscal year on Tuesday, he is sending a delegation led by his chief White House economic adviser, Gene B. Sperling, which includes three cabinet members: Attorney General Eric H. Holder Jr.; Shaun Donovan, secretary of housing and urban development; and Anthony R. Foxx, secretary of transportation and a former mayor of Charlotte, N.C.

Administration officials acknowledged that the initial aid would hardly solve problems in Detroit that have been decades in the making.  But, Mr. Sperling said, “It’s the largest city bankruptcy in the history of our country, on our watch, and we’ve got to do something.”

Yet the idea of the federal government’s responsibility toward Detroit is hardly a settled issue in Washington. Instead, divisions over the question reflect the fundamental divide between the two parties over the size and role of government.

Congress, preoccupied with reducing federal deficits, has been all but silent about helping the birthplace of the auto industry and, some say, of the American middle class.  The Republican-controlled House is hostile to any spending initiatives from Mr. Obama.  In the Senate, two Southern Republicans separately and unsuccessfully proposed legislation intended to ban bailouts — Detroit leaders have not sought one — briefly churning the racial currents at play over a city where four out of five residents are black.

So with the chances that Congress would pass any legislation for Detroit “somewhere between zero and zero,” as an administration official put it, Mr. Obama has fallen back on what he can do through executive actions, with available money and tax credits, or through partnerships with local businesses and foundations.

The effort is similar to the way he has worked around Congress to create advanced manufacturing centers nationwide with federal and local support, provide broadband in every classroom, speed up infrastructure projects and try to reduce gun violence.