News that President Obama wants to redirect some federal dollars toward a Detroit bailout brings to mind the old saw, “Politics Makes for Strange Bedfellows.” An online cultural dictionary points to Shakespeare as originating the line, “Misery acquaints a man with strange bedfellows.”
The misery here involves the consequence of decades of fiscal malpractice in Detroit: bankruptcy. The strange bedfellows are Republican Gov. Rick Snyder and Democratic President Barack Obama, both of whom are promoting partial bailouts for the city. This is not the first time the two have collaborated.
In 2011, Gov. Snyder fought hard to implement the President’s signature legislative product, the “Affordable Care Act,” by trying to create a state “exchange” to distribute its subsidies. (One suspects that many in the Snyder administration have been breathing sighs of relief that the effort failed.)
The governor did succeed, however, in adopting an even more critical Obamacare component — its huge expansion of Medicaid. To make that happen, Gov. Snyder was forced to rely on mostly Democratic votes in the Republican-run state House and Senate.
He may have to do the same to get $350 million for a state bailout of Detroit. MLive and others are reporting that Michigan House Speaker Jase Bolger has made it clear the bailout faces an uphill struggle in the Republican-run Legislature. A public opinion poll commissioned by the Mackinac Center earlier this month found that GOP voters statewide oppose a Detroit bailout by a 55-38 margin.
This raises a reasonable question: If a Republican governor and a Republican Speaker of the House can’t martial sufficient votes for a bailout from a Republican House majority, what might the pair have to offer Democratic lawmakers to get the deal done?
For example, might they promise to not attempt a repeal of the state’s awful “prevailing wage” law, which prohibits awarding government contracts to the lowest bidder unless a firm pays above-market union wages? Statewide it has been estimated that this law costs taxpayers more than $200 million annually.What other sound policy might be sacrificed on the altar of a Detroit bailout?
A bailout would be bad for Michigan residents and in the long run probably bad for Detroit, too. It should be abandoned. Let Detroit bail itself out. If this means selling off some paintings from its collection, an airport and other assets, so be it.
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Michael D. LaFaive is director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.
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