Dems block Vitter’s bill to prohibit a federal ‘bailout’ of Detroit

“When you look at situations like the Detroit — the largest ever municipal bankruptcy — and you look at our situation at the federal level … this prohibition of bailouts if very much needed,” Vitter said before asking unanimous consent that the Senate begin considering his bill. “There is very much the real danger of these states and localities seeking a federal bailout.”

{mosads}Sen. Ron Wyden (D-Ore.) objected to Vitter’s bill, saying it would “deal a huge body blow” to rural communities that would no longer get funding for things such as education and police protection. 

“This is really a slap in the face to every city and community across our country,” Sen. Debbie Stabenow (D-Mich.) said. “This is not about stopping a bailout to Detroit.”

The bill would prohibit the Federal Reserve of the Department of Treasury from “bailing out” cities, states and counties that are in financial trouble. But the bill would also end all federal funding to those municipalities, with the exception of natural disaster relief.

Sen. Carl Levin (D-Mich.) defended Detroit, saying he didn’t know of anyone “seeking a bailout.”

“My town hasn’t asked for a bailout,” Levin said.

Democrats have complained that because the bill is vaguely worded as to what qualifies as “at risk” many cities and states could lose federal funding for roads, police and special education among others if it were to become law. 

The Democratically-controlled Senate is unlikely to consider Vitter’s bill any time soon.