April 15 Michigan officials and President Barack
Obama's Administration are discussing a plan to free up $100
million in federal money to aid Detroit's retired city workers,
the Detroit Free Press reported on Tuesday.
Citing two people familiar with the talks, the newspaper
said the talks were centered around federal money flowing to
Michigan for blight removal. Under the plan, $100 million would
be earmarked for Detroit, reducing the $500 million the city's
emergency manager, Kevyn Orr, plans to use to eliminate blight
over the next 10 years.
The $100 million saved could then be used by Orr to ease
pension cuts for retirees under the city's plan to adjust its
$18 billion of debt and exit the biggest municipal bankruptcy in
U.S. history, according to the report.
A spokeswoman for Michigan Governor Rick Snyder declined to
comment on the report. Orr's spokesman did not immediately
respond to a request for comment. The Free Press said the White
House would not comment late Tuesday.
Snyder has asked the state legislature to allocate $350
million in settlement money that the state receives for Detroit
from U.S. tobacco companies over 20 years. That money along with
funds pledged by philanthropic foundations and the Detroit
Institute of Arts, would raise about $815 million for the city's
retirees and eliminate the possibility of a fire sale of art
works in the city's bankruptcy.
Detroit's police and fire retirees would see no pension
reduction under a deal reached announced by U.S. Bankruptcy
Court mediators on Tuesday. That deal relies on the $815
(Reporting By Karen Pierog; Editing by Ken Wills)