Detroit Bankruptcy Ruling Paves Way for Nationwide Attack on Pensions
By Jerry White
Global Research
December 04, 2013
Federal bankruptcy court judge Steven Rhodes on Tuesday gave the go ahead for the city of Detroit to proceed with the largest municipal bankruptcy in US history.
In his ruling supporting Detroit Emergency Manager Kevyn Orr, Rhodes explicitly sanctioned the gutting of the pensions of the city’s 23,500 retired municipal workers, overriding prohibitions against such cuts in the Michigan Constitution. Reading out a 90 minute summary of his ruling from the bench, Rhodes provided a pseudo-legal framework for a nationwide attack on the pensions of millions of firefighters, teachers, transit workers, and other public employees.
Rhodes crafted his ruling to serve as a precedent for city and state governments across the country to carry out a similar conspiracy against the working class as has been carried out in Detroit, using the federal bankruptcy courts to override state and local laws, and strip workers of retirement benefits earned in the course of years of public service.
It is no accident that only hours after Rhodes issued his ruling, both chambers of the Illinois legislature voted to impose a pension “reform” that will rob Illinois state workers of thousands of dollars in retirement income.
Rhodes’ ruling marks a turning point in class relations in the US comparable to President Ronald Reagan’s firing of the striking PATCO air traffic controllers in 1981. That action signaled a government-backed attack on the unions in which the strike-breaking methods of the first decades of the 20th century were revived in order to impose mass layoffs and brutal cuts in wages and benefits. With the collaboration of the union leadership, struggles of workers against concessions were isolated and defeated, ushering in an assault on working class living standards that has continued ever since and has been intensified since the Wall Street crash of 2008.
Rhodes’ ruling signals a new stage in the ruling class offensive, in which pensions, medical benefits, safety and health regulations—in short, every limitation on the exploitation of the working class—will be eliminated. This nationwide assault has the explicit backing of the Obama administration, which filed a brief supporting the bankruptcy process.
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