Hopes of bailout for Motown hit buffers

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During the bleakest days of America’s Great Recession, Congress agreed to bail out two of Detroit’s biggest businesses, General Motors and Chrysler.

Today, however, there seems little appetite from either Democrats or Republicans in Washington for a government rescue of the birthplace of the car industry, which is the largest American city to file for bankruptcy protection.

Such a bailout would be huge, perhaps as much as £20bn (£13bn). Federal resources are strained, with the national debt at $16.7 trillion (£11 trillion) and the government struggling under the constraints of automatic spending cuts that took effect in March.

President Barack Obama has had a hard enough time getting his present proposals through
Congress, where Democrats hold a narrow majority in the Senate and Republicans are in firm control of the House of Representatives.

Ross Baker, a political science professor at Rutgers University who specialises in Congress, said: “I think it would be a waste of the president’s time to even propose it. His plate is so full and throwing Detroit into the mix is the last thing in the world he’d want.”

“I think the era of big government bailouts is over.”

Political leaders in Washington have not pushed for a bailout of Detroit, which was the nation’s fourth-largest city in the 1950s, but since has had a declining population, accelerated by hard times for the car industry during and right after the punishing 2008-2009 recession.

Opportunities for spending vast sums of money on a bailout for Detroit seem severely limited. The White House is exhibiting little enthusiasm for another big bailout. Vice President Joe Biden said in response to a reporter’s question about a possible rescue: “Can we help Detroit? We don’t know.”

Presidential spokesman Jay Carney, when asked if a bailout was a possibility, said: “We will, of course, as we would with any city in this country, work with that city and have policy discussions with leaders in the city, and make suggestions and offer assistance where we can.”