by ACLU of Michigan on Feb 25, 2014
By Curt Guyette, Investigative Reporter
What can be said with absolute certainty about the so-called plan of adjustment Detroit Emergency Manager Kevyn Orr released last week?
It is a plan built on a mountain of ifs.According to a summary of the plan, “police and fire retirees would likely receive in excess of 90 percent of their earned pensions after elimination of cost of living allowances,” and “general retirees would likely receive in excess of 70 percent of their pensions after elimination of cost of living allowances.”
But that’s only if they agree to give up without a fight and promise no lawsuits in the future. Otherwise the deal gets more stingy, and will be heaped on top of crushing cuts to medical benefits.
Either way, the offer hinges on a promise by Gov. Rick Snyder to deliver $350 million in state money. But that’s a pledge Snyder can’t fill on his own. To actually deliver all those millions, he must convince a legislature that’s controlled by conservatives often hostile to Detroit to actually appropriate the money.
On the other hand, it could be that the pensioners won’t have to take any cut at all. Obscured by all the coverage of Orr’s proposed “adjustments” was news that the U.S. 6th Circuit of Appeals had agreed to consider a case, brought by the city’s two pension systems and others, which challenges the legitimacy of the bankruptcy itself.
A key component of that case is the contention that the Michigan Constitution guarantees the payment of pensions promised to public employees, and that U.S. Bankruptcy Judge Steven Rhodes grievously erred when he allowed those pensions to be placed on the chopping block along with other unsecured creditors.
And just who, really, is an unsecured creditor – meaning one that is subject to the kind of buzz cuts the bankruptcy court will be administering?