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First Thoughts: A canary in the coal mine? - NBCNews.com

Posted: 19 Jul 2013 09:21 AM PDT

Is Detroit's bankruptcy a canary in the coal mine?... Hey, get this: Congress did get something done this week… Cruz and Paul head to the Hawkeye State… Peter King to run for president?... This week's 2016 round-up… Colorado's recall races are set for September… And previewing the first Cuccinelli-McAuliffe debate.

By Chuck Todd, Mark Murray, Domenico Montanaro, and Brooke Brower

*** A canary in the coal mine? The news on Thursday that the city of Detroit filed for bankruptcy probably isn't an isolated incident. While a variety of factors put the Motor City in the fast lane to bankruptcy -- chief on the list is the city's steep decline in population (and thus tax base) -- its pension and other liabilities are concerns that plenty of mayors and governors have across the country. The question they are all asking: How do they provide retirement security and health care for their employees without busting their budgets? Answering the question is one of the hardest tasks in politics. But Detroit's bankruptcy -- as sad as it is for one of America's iconic cities -- could end up being a blessing in disguise for mayors and governors, who find themselves stuck in negotiations with their public-sector unions on these pension and health-care plans. Just like we saw with automotive industry in 2008-2009, does it give all parties across the country (governments, unions, employees) an incentive to work out deals that they could accept? Because it's likely that Detroit isn't the only community on the path to bankruptcy.

Rebecca Cook / REUTERS

A large "Opportunity Made In Detroit" banner is seen on the side of a building in downtown Detroit, Michigan in this January 30, 2013 file photo.

*** Detroit to become the new rhetorical weapon: On the rhetorical front, prepare for Detroit to be used as a new political weapon, whether it's fiscal conservative hawks in Washington wanting to jumpstart the conversation about long-term debt liabilities for the federal government, or Democrats who want more money spent on rebuilding American cities rather than rebuilding Kabul. Bottom line: Detroit's bankruptcy has been telegraphed for some time, but it'll be interesting whether it's treated as a problem unique to Detroit and the auto industry, or whether it's used to have the larger conversation that every actual responsible local elected official is facing: budget shortfalls, pension expectations from another era, and (most importantly) no easy answer to what the next economic revival looks like.

*** Hey, Congress did get something done this week: For as bad as last week was in Washington's dysfunction, this week turned out to show some progress in Congress actually getting things done. Senate Democrats and Republicans reached a deal to avert a change in the chamber's filibuster rules, which led to the confirmation of President Obama's picks to head the EPA, the Labor Department, and the Consumer Financial Protection Bureau. (That said, the final confirmation vote for new Labor Secretary Tom Perez was a straight party-line vote, the first time that's happened for a cabinet secretary in a long, long time. And for a Labor secretary!!! No offense to the Department of Labor, but as Seth Myers might ask, "Really?") What's more, Senate Democrats and Republicans also reached a deal on student loans, and a vote on that could come as early as this Tuesday. Are we seeing green shoots in reducing Washington's gridlock? Or is this week's progress just an exception? Of course, the bar has been set INCREDIBLY low when confirming executive-branch appointments and reaching a deal on student loans are signs of progress. And we're not even talking about the U.S. House of Representatives….

*** Yet McConnell had a rough week: But while this week seemed like a decent one in reducing gridlock, there is a larger developing story inside the Republican Senate conference that shouldn't go unnoticed: Republican critics of McConnell no longer fear him, especially in speaking with reporters. Politico: "Some think the leadership is ducking the tough votes and allowing the rank-and-file to shoulder the burden. 'This leadership team has adopted the Obama "lead-from-behind" approach to governing,' said a senior Senate Republican source, who asked for anonymity to speak candidly. 'It hasn't worked for the president and it doesn't appear to be working here either.'" Ouch. McConnell's leadership style is clearly rubbing a minority of senators the wrong way. McConnell's decision to essentially make decisions to appease the conservative base over and the old bulls or the "legislating/business wing" of the conference is starting to grate on some folks. Bob Corker clearly isn't hiding his disgust. And others seem more comfortable criticizing.

*** Cruz and Paul head to the Hawkeye State: Sens. Ted Cruz (R-TX) and Rand Paul (R-KY) are in Des Moines, Iowa today to speak at a gathering of state evangelical Christians. "Cruz … will speak during breakfast today. Paul … is the guest speaker during lunch," the Des Moines Register writes. Cruz, who's making his first-ever visit to the Hawkeye State, also headlines an Iowa Republican Party fundraiser today. And he spoke by phone with the Des Moines Register, defending his co-sponsorship of Sen. Kirsten Gillibrand's legislation to curb sexual assaults in the military. "In my view, we owe our men and women in uniform a solemn duty to protect them," he told the paper. "And to allow a young man or young woman who has stepped forward to defend our nation to be the victim, not of hostile fire from the enemy, but by a sexual assault from her colleagues, is a fundamental violation of that trust." By the way, a Ted Cruz timeline reminder: It hasn't even been a year since he's run the Texas Senate run-off. A year later, he's off to Iowa. Now THAT's fast-tracking things.

*** Peter King in 2016? Rep. Peter King (R-NY) says he is considering a presidential bid after "a number of Republicans both in New York and around the country" have approached him about running, NBC's Frank Thorp reports. King says he would run to draw more attention to national security, something he thinks the current prospects don't speak about enough. "[The field] is sort of defined by Rand Paul, who's more worried about some guy sitting at Starbucks getting killed by a CIA drone than about Islamic terrorism," King told Thorp. "I consider him an isolationist who has no real concept of the threats facing us in the world today. I think it would dramatically weaken America's power in the world." King wasn't as harsh on Sen. Marco Rubio's (R-FL) foreign policy chops, saying that the senator is "very able and very articulate." But King said that he still takes issue with Rubio's opposition to supplemental aid for Superstorm Sandy victims. "The fact that he voted against the aid to New York after we sent billions and billions of dollars to Florida, that's really hard to accept," King said. But can he win? "If I go, I think I could, otherwise I wouldn't do it. But we'll see what happens," he said, "It's a great country." King also talked about his 2016 intentions on "Morning Joe" this morning, and in the first two minutes of talking about the idea of running, he mentioned Rand Paul negatively three times. Something to watch: King's comments were VERY personal about Paul.

*** This week's 2016 round-up: In other 2016 news, Nancy Pelosi told NBC's Andrea Mitchell that she's fully aboard the "Hillary Clinton for President" train -- if Clinton runs… Joe Biden talked about 2016 in an interview with GQ. "I can die a happy man never having been president of the United States of America. But it doesn't mean I won't run."… Speaking to an African-American sorority group, Clinton invoked Trayvon Martin's death. "No mother, no father, should ever have to fear for their child walking down a street in the United States of America," she said…. In the battleground state of Virginia, a Quinnipiac poll found Clinton leading Chris Christie by five points, 45%-40%, and Rand Paul by 14 points, 51%-47%. But Christie tops Biden by eight points, 46%-38%, while Biden beats Paul, 47%-40%... On Wednesday, Marco Rubio delivered a speech criticizing Obama Labor Secretary pick Tom Perez. (Perez cleared the Senate by a party-line 54-46 vote on Thursday.)… Cruz and Paul signed on to Kirsten Gillibrand's legislation on sexual assaults in the military… And Rick Perry on Thursday signed the anti-abortion legislation into law in Texas.

*** This week's 2016 round-up, Part 2: And there's more: Scott Walker came out with a new budget that has angered conservatives because it increases spending and borrowing… Rand Paul came out strongly in support of Mike Enzi in the Enzi-Cheney primary race in Wyoming… And Paul Ryan will just so happen to be in Iowa for Terry Branstad's birthday in November, where he'll keynote the event.

*** The recall races of 2013: Mark your calendars for Sept. 10, the date of recall elections for two Colorado elected officials over their support for stricter gun laws. "For the first time in Colorado history, two state lawmakers will face recall elections for their support of tougher gun control measures," Politico writes. "Colorado's Democratic Gov. John Hickenlooper signed an executive order on Thursday setting the date for the recall elections of the pair of Democratic state senators. Under pressure of a campaign by the NRA, Senate State President John Morse and Pueblo Sen. Angela Giron will face the first recall effort in Colorado history." The Denver Post: A Denver judge Thursday ruled petitions submitted to oust a pair of Democratic senators from office are valid, a pivotal ruling that sets in motion Colorado's first-ever recall election of state lawmakers. … In total, Second Amendment activists tried to recall four Democratic state lawmakers because of their gun votes. But signature-gathering efforts against Sen. Evie Hudak of Westminster and Rep. Mike McLachlan of Durango failed." The elections will costs between $150,000 and $200,000. These recalls could tell us a lot about just how vulnerable Gov. Hickenlooper (D) may be in 2014…

*** Previewing the first Cuccinelli-McAuliffe debate: Finally, Ken Cuccinelli (R) and Terry McAuliffe (D) will participate on Saturday in their first debate in Virginia's gubernatorial contest. The Fredericksburg (VA) Free Lance-Star sets the stage. "PBS' Judy Woodruff will moderate the debate, which starts at 11 a.m. Relatively few will see it in person—it is sponsored by the Virginia Bar Association and held at the remote Homestead resort in the western edge of the state. But for the first time, PBS has agreed to live-stream the debate online, meaning that anyone dedicated enough to watch a political debate on the Internet on a Saturday morning in July can see how the candidates fare in their first matchup."

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Detroit bankruptcy: 'Enough is enough,' governor says of decline - Los Angeles Times

Posted: 19 Jul 2013 09:09 AM PDT

Calling it the lowest point in Detroit history but a chance to stabilize a city spiraling into decline for decades, Michigan Gov. Rick Snyder announced Friday that the state-appointed emergency manager had filed for Chapter 9 protection.

The move makes Detroit the largest city in the nation to file for bankruptcy. The former auto industry powerhouse is now being closely watched by debt-ridden and cash-strapped municipalities across the United States.

"Let's get Detroit on the path to be a great city again," Snyder said in a morning news conference. "Today is a major step on getting on that path .... It's time to move forward."

The news conference came one day after Snyder authorized Detroit Emergency Manager Kevyn Orr to seek federal bankruptcy protection for the city, which has an estimated $18 billion in debt. For decades, Detroit has suffered job losses in the auto industry, plummeting population and the inability to provide decent basic services to its residents because there aren't enough people paying taxes.

The city has also ranked among the top 10 most violent in the United States for 24 of the last 27 years, Snyder noted. He went on to reiterate a long list of city troubles, such as an average police response time of about 58 minutes. The national average is about 11 minutes.

"That's a tragic situation. If you look at the history, it's been a large period of decline .… It's time to say enough is enough," Snyder said.

Despite the bankruptcy, he made it a point to say that life in the city is business as usual and that normal operations will continue. The bankruptcy will give Detroit the chance to do better and come out stronger, he repeated. A sign reading "Reinventing Detroit" hung from the lectern from where he spoke.

"People are still going to work and still are getting paid," he said.

A couple of days ago, Orr sent a letter to Snyder declaring that he believed there was no alternative to filing for bankruptcy. Fiscal mismanagement, population decline, poor services and crumbling infrastructure are all to blame, Orr wrote.

"This has been a decision that in one fashion or another has been working its way through the city for the better part of six decades," Orr said to a room full of reporters. "We're finally at the point that we simply cannot kick the can down the road any further."

Detroit now beats out Stockton, Calif., as the biggest city to seek bankruptcy protection. San Bernardino filed for bankruptcy protection last August.

In its heyday of the 1950s, Detroit touted a population of 1.8 million, making it one of the five largest cities in the nation. Migration to the suburbs, a race riot in the 1960s and the shrinking auto industry contributed to the population losses.

Now, thousands of abandoned buildings with neglected lots can be found throughout the city and only 713,000 residents remain.

Orr filed for bankruptcy with those citizens in mind, he said. Still, city officials plan to be reasonable with those they're indebted to, such as unrepresented retirees with government pensions, Orr said.

"We will be fair," he said, "Even under the guise of Chapter 9."

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cindy.carcamo@latimes.com

Twitter: @thecindycarcamo