Afraid that the US might borrow more money to bail out Detroit, Sen. Rand Paul says he’s working on a Republican rescue plan that would provide Congress with an alternative method to obtain the funds for a potential bailout.
Speaking on Glenn Beck’s conservative radio show, the Kentucky Republican said he strongly opposes borrowing money to bail out the bankrupt city, and considers bankruptcy an “opportunity” to “start out afresh.” But he also said that he has begun discussing a conservative federal bailout plan with his legislative staff, in case Congress and the Obama administration choose to rescue the city from financial devastation.
“I’ve been talking with my staff about having a Republican alternative to it, because I think there is a way, in an economically depressed zone, to have some tax forbearance, reduce some taxes, encourage people to come in and take abandoned property," he said. "I will not be for borrowing any money from China to try to bail out Detroit, particularly if they continue the same policies."
Paul suggested that the US could reduce the aid it provides to Egypt and instead spend the money on domestic infrastructure and rebuilding Detroit. He recently condemned the Obama administration for allowing US cities to go bankrupt, while sending money to Cairo.
“When a military coup overturns a democratically elected government, all military aid must end,” he wrote in a Washington Times column. "President Obama sends billions of dollars to Egypt in the form of advanced fighter jets and tanks. Meanwhile, cities like Detroit and Chicago crumble.”
Paul told Beck that he hopes his proposal to reassign funds could generate Republican support in a city that is overwhelmingly Democratic, but admitted that the prospect might be unrealistic.
“Maybe the people who have been voting for the Democrats for 50 years in Detroit, who ran the once-great city into the ground, maybe they choose some new leadership, and the Republican Party would have a resurgence in Detroit,” he said. “But that may be wishful thinking.”
At this point, there are no official plans for a federal bailout,
and it remains unclear if there are any Democratic plans to
restructure the city. Treasury Secretary Jack Lew has denied that
the administration wants a bailout, but some Democratic lawmakers
said they would seek federal assistance for the broke city.
With $18 billion in outstanding debts, Detroit filed for federal bankruptcy in July, making it the largest city in American history to do so. Last month, Paul warned that there would only be a bailout over “my dead body because we don’t have any money in Washington.” But by drawing up a Republican bailout plan, he will be prepared to present an alternative, in the case that lawmakers attempt to increase the national debt to save Detroit.