Graham opposes Detroit Bailout

U.S. Senator Lindsey Graham (R-South Carolina) introduced an amendment to the Fiscal Year 2014 Financial Services and General Government Appropriations Act to prohibit the federal government from bailing out municipalities like Detroit, which are facing bankruptcy. Several Members of Congress have suggested the federal government should step in an assist Detroit.  In addition, just last week President Obama’s former ‘car czar’ Steven Rattner said the Obama Administration should step in and rescue Detroit, which is suffering from years of poor financial planning. “Should the federal government bailout Detroit?” asked Graham.  “No way. No how.  There is no doubt Detroit has huge problems, but they are facing problems of their own making.  Detroit and other municipalities facing these issues need to get their own financial houses in order. The federal government is beyond broke. The last thing we need is the broke bailing out the broke. Taking on financial obligations which can be handled at the state and local level is a very bad idea.” The Graham Amendment says that no federal funds may be used to purchase or guarantee any asset or obligation of any municipal, local, or county government if that locality has defaulted, is at risk of defaulting, or likely to default absent such federal assistance. In addition, the federal government would also be prohibited from issuing lines of credit or providing direct or indirect financial aid to prevent bankruptcy. “In South Carolina both our state government and localities have faced several lean budget years,” continued Graham.  “They were forced to make tough, painful decisions which were not easy.  But they faced up to the challenges and did what was necessary.  Other states and localities should do likewise.”