CNN "Newsroom" - Transcript: Detroit Bankruptcy


Date: June 20, 2014


HARLOW: The "Washington Post" calls him, quote, "one of the most hard to pin down Republicans in the country." Michigan Governor Rick Snyder was among those who believed that bankruptcy was the right move for Detroit. $18 billion in debt, it is the largest municipal bankruptcy in American history but now the same governor is one of the biggest advocates for an aid deal worth almost $200 million trying to pull Detroit out of bankruptcy.

Despite a pretty tough political fight, it passed with broad bipartisan support. Later this morning, he is headed over to sign it. Sign that aid package into law. He joins me now from Detroit.

Governor, thank you for being here. We appreciate it.

GOV. RICK SNYDER (R), MICHIGAN: It's great to be with you, Poppy. It's an important day to sign these bill, it's another step on getting Detroit on the path to being a great exciting city again.

HARLOW: You know, I've covered Detroit really extensively. Spent a lot of time there up with you in Lansing. This is a big step. It's frankly unprecedented, according to analysts that cover bankruptcies like this that I've talked to.

But the road ahead for Detroit is still very long. You have a big fight between pensioners, creditors and the city.

Do you see a successful exit from bankruptcy for Detroit come this fall, as you're hoping for?

SNYDER: Yes, it should happen. There are two more important steps after the signing today. There's a vote of retirees and we need a yes vote on that, and that's due by July 11.

The second stage is the bankruptcy trial itself with Judge Rhodes (ph) who needs to approve the plan of adjustment. And that's an important step. And that trial begins in late August.

Those are the two major steps left in the process. Assuming positive outcomes both those steps, then we should be in a position to emerge from bankruptcy and get the city with the mayor and the city council with good financial oversight, all focus on growing the city of Detroit. That's a truly exciting proposition.

HARLOW: Let's talk about what a new Detroit out of bankruptcy looks like, because the real struggle you still have is the fact that the tax base has been so depleted. So many people in businesses leaving Detroit. You're having a lot of success downtown bringing tech businesses back in. What do you do to get people back in Detroit paying to build that back up?

SNYDER: Well, it's starting to move already, Poppy. That's the good part. The bankruptcy is the municipal government. But Detroit's already coming back. As you said, midtown and downtown are very exciting, over 10,000 jobs have moved in the city.

We're out of housing now for young professionals. Detroit's one of the hot places to live in the country. And that's really exciting.

We have major projects on the drawing board, a new hockey arena, a light rail system. There's a lot of great things going on. The one thing in particular, we also need to make sure that neighborhoods are participating in this. And that's why there's some great programs with micro loan programs, entrepreneurship programs, and removing blight.

I think the mayor has done exciting things about trying to get blight removed in the city. So, it's a good partnership.

HARLOW: You know, Governor, some have made that argument, look, Detroit needs to take responsibility for years, decades of financial mismanagement, corrupt politics and not get bailed out by the state or real change, fundamental change isn't going to happen. What do you say to them?

SNYDER: Well, this isn't a bailout. This is a settlement, because the settlement is a number of parties to do something truly unique on a voluntary basis. So, this is the foundation community, Detroit Institute of Art Donors. Labor coming to the state to put a grand bargain of over $800 million over a period of time to say let's soften the blow on retirees that otherwise wouldn't be available.

It really allows the case to move forward faster. It helps those retirees which is critically important, because they have made and will make real sacrifices. So, this is a way to win together. And the way I view this, this is a smart settlement so we can all grow Detroit.

HARLOW: I've talked to a lot of those retired city workers who are scared of what's ahead and what that bankruptcy filing meant for them.

I want your response to this. The Americans of Prosperity, this is a group backed by the Koch brothers, wanted to see Detroit sell its assets, like its artwork. It's got a lot of valuable artwork, other assets to pay its debt.

They see this as a bailout. I know you call it a settlement, they see it as a bailout. They have vowed to work for the defeat of lawmakers who supported this package for Detroit. Are you worried at all that, Governor, that some of your Republican allies in the legislature are going to pay a price with a future defeat because they voted for this package?

SNYDER: Well, the feedback after the bills were passed through the legislature was fabulous. It was with broad bipartisan support. Again, the legislators from the Lake Michigan shoreline, the upper peninsula supported it.

No, it's really interesting. I went and talked to a number of them afterward. I said, how did it go back in your district? The feedback was overwhelmingly positive from all corners. In fact, I had a couple of legislators that had voted no that came up and said this is a vote I'm probably going to regret. I probably in the long term will wish I voted yes on this.

HARLOW: Really quickly, we have to wrap up here. I got to ask you. Detroit is building a big new hockey arena right downtown. Millions of that is coming from taxpayer dollars. I know it's going to create a number of jobs in downtown Detroit, bring revenue is. But the question is, a lot of people are scratching their heads about, is this the right use of taxpayer money in Detroit right now when you have streets where you can't turn the lights on, where trash can't be picked up? Is this the right move?

SNYDER: Well, the good part is, we have new trash providers that's getting picked up, lights are going up, so all that is happening in Detroit. And at the same time, a normal arena, I wouldn't be supportive of.

But this is a critically important area that will connect midtown and downtown Detroit, and really be a glue to really strengthen things and accelerate even more growth than what's already going on.

So, I think it's a good thing for the city and it's exciting.

HARLOW: We'll be watching. As you know, I am a big advocate, a big fan of Detroit and I'm waiting for that city to come back. Positive things happening down there as well.

Thank you, Governor. We appreciate it very much.

SNYDER: Thanks, Poppy.