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White House Monitoring, Not Stepping In To Bail Out Detroit

DETROIT (WWJ) - Uncle Sam is watching, but there is no federal government bailout in the works for Detroit.

On the day the struggling city filed for Chapter 9 bankruptcy protection — the largest such filing in U.S. history — White House spokesperson  Keith Maley issued the following statement:

"The President and members of the President's senior team continue to closely monitor the situation in Detroit. While leaders on the ground in Michigan and the city's creditors understand that they must find a solution to Detroit's serious financial challenge, we remain committed to continuing our strong partnership with Detroit as it works to recover and revitalize and maintain its status as one of America's great cities."

Although the numbers shows President Barack Obama did not need Detroit to cement his re-election victory, some have suggested that he owes something to the city.

Detroit City Councilwoman JoAnn Watson made headlines last year when she suggested that the President should repay Detroiters for their votes by offering a federal bailout.

"Our people in an overwhelming way supported the re-election of this president and there ought to be a quid pro quo, and you ought to exercise leadership on that," Watson said. "Of course, not just that, but why not?"

She added: "After the election of Jimmy Carter, the honorable Coleman Alexander Young, he went to Washington, D.C. He came home with some bacon," said Watson. "That's what you do."

Some have said that if the feds stepped in to save General Motors, why not the Motor City itself?

Local bankruptcy expert Doug Berstein, of  West Bloomfield's Plunkett Cooney Law Firm, says Detroit's bankruptcy is not quite the same as those in the automotive industry.

"The GM and the Chrysler situations were different in that they had products to sell — the city does not," Berstein told WWJ Newsradio 950.

Bernstein said Thursday's filing will kick off a multi-month period during which a federal judge and consultants will determine whether Detroit is eligible for Chapter 9 protection.  " ... I wouldn't expect things to go as quickly [as they did for GM and Chrysler], but hopefully we'll be able to make some progress soon."

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