Michigan Attorney General Bill Schuette says he thinks the U.S. Supreme Court will eventually decide whether pensions will be protected for city employees in the Detroit bankruptcy case.
Schuette is challenging a federal judge’s decision that says it’s possible to cut pension benefits as part of the bankruptcy. The judge says federal bankruptcy law preempts pension protections in the state constitution.
The question, Schuette says, is whether a state constitutional clause governs in this case, or perhaps federal clauses on bankruptcy or supremacy.
“So who wins? Who trumps?” Schuette says the question is a new one and of wide interest as local governments across the country with big pension liabilities watch what happens in Detroit’s bankruptcy. “I’m going to very aggressively represent and defend our constitution, and, in the end, the Supreme Court will say, will make a ruling and that will be the final decision.”
Detroit’s emergency manager says there’s $9.5 billion dollars in unfunded pension and retirement healthcare liabilities.
