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This out what exactly is the fiscal situation more insolvent.
It's happening from coast to coast this city kept issuing debt bankruptcy it -- -- full court.
It's a horrible thing to see.
-- so wait corruption and crime what words would you use to describe the financial situation at all.
Who's to -- these were all his ideas and taxpayers trust and who will have to pay the salaries and benefits have to be renegotiate.
-- -- Why -- that that.
What's the fix when we come together as a city -- and we can come.
Fox News report cities going broke reporting from Wall Street in New York sit here -- -- This hour we're going to take you inside an alarming trend cities that have slid deep into debt even bankruptcy.
New York's not on that list today but for a number of other reasons we begin our report from this -- America's financial nerve center.
The first reason is simple some of the nation's most desperate cities are in trouble because of the millions they've borrowed from Wall Street.
We saw that 171.
Miles from here in -- city buried under decades of -- Harrisburg Pennsylvania is the capital of the keystone state.
You'd think it had been run by the keystone cops what exactly is the fiscal situation.
Well number one more insolvent.
Dan Miller is Harrisburg controller my office is projecting that we would have -- fifteen million dollar deficit.
This year and I -- gonna struggle from paycheck to paycheck with one point six million dollars.
We have a health insurance bill that needs to be paid -- payroll every two weeks with a million dollars.
And in their ego -- make payroll next week -- -- that -- we have no more money it's very bleak situation.
The leak at about captures it.
Harrisburg is deep and hop to Wall Street and can't make the payments are millions of dollars of bonds.
It's gotten so bad.
Harrisburg doesn't even have a credit rating anymore.
It's difficult to sell homes people are moving into the city businesses don't want -- -- here so how did you come to this.
The story begins in November 1981.
When voters elected Democrats Stephen -- mayor.
He'd remain in office 28 -- a tenure marked by a public building boom financed by a series of big debt deals with Wall Street.
The first in 1986.
Harrisburg borrow 390.
Million dollars to build -- hydroelectric dam on the Susquehanna River and then redevelop the waterfront.
Regulators blocked the dam so Harrisburg paid that money back.
But Reid could move ahead with the waterfront project part of his vision to turn Harrisburg into a national tourist destination.
That included a new one point six million dollar baseball stadium to lure a minor league franchise to -- Years later when the senators threatened to jump to another city Harrisburg issue bonds to buy the team.
Its price tag six point seven million dollars.
Then there was Reid's attempt at a wild west museum.
He spent some eight million dollars over sixteen years on artifacts from six shooters to doc holiday's sword -- Much of the collection is still stored in this warehouse.
Harrisburg national civil war museum did open in 2001.
At a cost of more than thirty million dollars.
You have all that together in one -- wow.
You are a national -- -- national class tourism.
Attraction these were all his ideas you know they -- that it and the public -- -- town hall meetings -- current mayor Democrat Linda Thompson.
Was on City Council from 2002.
He just felt like this is when he needed -- -- degree critical mass and bring -- into the city.
On these or his explanations when he was challenged.
But those challenges.
Really wouldn't come until -- -- finances collapsed under its most expensive well.
Was the biggest problem.
It never really worked like it was supposed to -- it has burned up hundreds of millions of dollars and some people now call this.
The incinerator from -- Originally built in 1972.
Before Reid took office.
The plant was supposed to generate profit by charging fees to burn garbage.
It didn't work out that way.
Mechanical problems shut it down so did the EPA multiple times this city had to make good decisions at certain points in time -- we incur more debt.
To get it running again or do we just -- and get rid of it.
And the city kept issuing debt.
Attorney -- on -- is a municipal bond specialist.
The state hired him as receiver.
To -- -- Harrisburg mess in 2003 there was about a hundred million of debt outstanding within four years there was 326.
On an incinerator.
They probably could carry hundred million if it was operating properly.
That debt crippled Harrisburg.
Which on cubic says scrambled for cash wherever could find it.
For example he says to make extra money the city started overcharging sewer customers.
For administration costs while it -- century old pipes collapse so it's not a huge one Harrisburg have these huge singles appear.
Directly related when he traced through all the money.
To incurring all -- step for the incinerator the former mayor actually use some of the money from the incinerator bonds.
For other projects.
How -- -- able to do that by moving money around it in different funds I can't tell you what move money he moved where other than.
He did so for example if you want to do something like start a museum you know rather than going to City Council and putting 500000 dollars in the budget you issue bonds for.
And you take a portion of that bond issue to.
Get money for -- purpose that he may not be able to get approved if he just goes through the normal budgeting process that doesn't seem legal.
I don't know I mean it's it's certainly questionable as a member City Council you voted for the incinerator -- -- was that a bad idea.
As it was sold to us now we -- our own professional consultants that told us it would be able to pay for itself clearly regret that vote now I regret it to the -- exact we relied on our consultants.
One thing her City Council did do was stop Reid from using any money from that incinerator bond issue.
To pay for other projects.
No authority fees.
Funds funding or.
Shall be applied to purchase artifacts.
Or to benefit any city museum.
Are related project.
The situation had gone from fiscal tragedy to farmers.
While the council -- Reid's plan for 830 plus million dollar national sports hall of fame next door to the baseball stadium.
The city did go along with a face -- to the ballpark itself.
Which would send taxpayers deeper in debt.
Follow this one Hertzberg sold the senators at a seven million dollar profit.
But then turned around and borrowed eighteen million dollars for stadium upgrades do you take some of the blame here.
My responsibility started back then I began to sound the alarm about this leadership.
And the final responsibility -- took on what's our ran against him and unseeded.
A private citizen since 2010.
Reid did not respond to our multiple interview requests over several weeks via phone.
-- -- So we dropped by his house.
And the building where he has an office you.
Within hours -- contacted us by email.
He claimed his various tourism initiatives boosted Harrisburg economy and that he did nothing wrong to pay for them.
As for the incinerator.
Reid noted it quote was approved by all governing bodies.
He also wrote he had a workable plan to wipe out the incinerator -- But that quote City Council stopped the process dead in its tracks he turned down our request to speak with him on camp you know he won't talk to us.
Was -- bad guy he's likable.
Very Smart man and taxpayers believed in his leadership and he trusted in him.
And he left them with a mess the question now how to deal with it.
And convict the state appointed receiver put together his plan to pay back the debt.
By among other things raising terrorist -- earned income tax and leasing out some of its parking grudges.
Mayor Thompson got behind that plan.
Comptroller Dan Miller and the City Council however don't think Harrisburg residents should be the only ones making concessions at this point.
They -- bankruptcy court to sort it all out forties who people say -- -- that the reality is you know you can only get so much blood from a turn -- But this man doesn't want to hear it he's Dominic Frederico the CEO of Assured Guaranty.
Which has insured the Harrisburg bonds.
That means assured we'll have to pay off the investors to the extent Harrisburg fails to.
Is your view that and these bond he has even if the project those compellent.
That the government is still on the line.
To pay -- did they make -- an absolute -- the.
Full facing credit is the terms you know typically use.
So there on the line sport if you give me your full briefing -- -- -- of course okay.
Last October the council filed for bankruptcy but it's petition was rejected because Thompson the mayor refused to sign it.
Now Miller is running against -- in next year's primary.
Dave -- -- -- on the other hand is done tending to Harrisburg.
Resigning in frustration.
We're at a point now today where you literally could not -- it can be on the roads so broken.
-- you just need to deal the problem now it now yes.
Up next the battle over pensions and benefits.
Fox Business network's Lou Dobbs with that story.
After the break.
As you've seen cities with big dreams and big bills.
Have come here to Wall Street for the cash to finance.
But even more towns are going broke not by issuing bonds.
But by issuing promises to public employee unions.
That story has a New York angle to Fox Business network's Lou Dobbs explain.
But it's a good natured sort of labor -- It was in 1935.
That president Franklin Roosevelt made it easier for workers in the private sector to create unions.
And when he signed the Wagner act he cemented and deepened political ties between organized labor.
And the Democratic Party but it doesn't cool enthusiasm -- -- But even FDR didn't think public sector unions made any sense collective bargaining is different for public workers because it's.
Their boss is really on -- saw your cold July Venus writes extensively on the roots of America's economic problems it's not Blake you're the boss of Ford.
That's not true -- government furthermore FDR wrote.
Strikes by public employees like police firefighters and teachers would be quote unthinkable and intolerable.
But it was within a couple of decades that is democratic errors decided the political upside of public sector unions was worth the risk.
The eureka moment happened right here in New York City.
Democratic mayor Robert Wagner whose US senator father ironically authored the Wagner act.
Granting municipal workers the right to bargain collectively.
Three years later those public unions organized to reelect him.
Wagner's unexpectedly strong -- -- caught the attention of another Democrat worried about reelection.
President John F.
President Kennedy sees how this -- wagon to victory.
And he issues they executive order allowing for the unionization of federal employees -- local governments pick this up as a -- And you have the rapid growth from there on all of public sector unions across the country historian Fred Segal of the Manhattan institute.
Says the new unions almost unbearably worked to elect Democrats.
The unions get pay increases pension increases health care increases.
Meanwhile the -- take some of the money that gets from the city and invest in local elections.
So it continues to let people will give you -- -- and they also became a political force unto themselves.
You can't act without their cooperation.
That's because when elected officials didn't cooperate.
The public sector unions that FDR warned about.
-- those unthinkable strikes.
The most memorable case the summer of 1975.
-- New York was close to bankruptcy.
Sanitation workers like garbage pile up in the streets while laid off police marched and shut down the Brooklyn Bridge.
Public employee unions demonstrated their -- nationally when they helped Senator Ted Kennedy.
Now -- surprisingly strong primary challenge.
To a sitting democratic president.
They didn't like.
Public safety unions become to get out the vote machine.
The old Democratic Party machine once was.
Carter was renominated.
But he lost to Ronald Reagan who had the support of at least one public sector union.
The air traffic controllers.
That would last.
Months later the -- -- rejected a government contract offer they went on strike.
But that was not allowed under federal law and President Reagan -- buyer in the mall.
We cannot compare labor management relations in the private sector with government.
Government has to provide without interruption of protective services which are government's reason for being.
So it's not surprising public unions ally -- Democrat says Providence, Rhode Island fire department's union president.
All reality if you look just generally -- Republican Party they believe and a smaller government as a government worker.
I don't know necessarily agree with that.
By the 2008 election.
A former community organizer with long ties to one of the largest government employee unions -- -- Was setting the stage for an epic battle over these organizations.
And their clock.
-- financial crisis would catapult their man to the White House.
But it would also bring those dire warnings about public sector unions.
From FDR zero.
Back into focus.
And one other thing -- In 2009.
Public employee unions actually the clips the membership a private sector unions.
Lou thanks a lot we'll see a little bit later yeah.
Up next I go across the country to one of those union towns that just filed for bankruptcy.
You -- why many fear public sector unions could bankrupt cities and states.
It's happening right now in California.
Let's take a trip down route 66.
-- -- -- -- Room.
Sees him on old route 66.
San Bernardino was known as the last stop before LA.
-- -- And only three freeways in a major railroad station.
It was the ideal hub linking the ports of Los Angeles and Long Beach out to the rest of the country.
San Bernardino symbolize the promise that economic growth held for middle class America.
It was even the location of the first McDonald's.
But today in this city of around 2101000.
Has a shortfall of 46 million dollars.
Over a quarter of its entire budget.
Unable to find enough cuts to close the gap.
San Bernadine L on August 1.
Filed for bankruptcy and you've called this as staying on the city.
Yes Patrick Morrissey a Democrat has been mayor of San Bernardino since 2006.
How -- San Bernardino -- and it is.
Predicament that was a perfect storm economically.
When it hit in 2006.
The bottom fell out.
In that perfect storm Mora says San Bernardino property values dropped by 65%.
Seven car dealerships -- And the city lost tens of millions of dollars in sales real estate and income tax receipts although we.
Do not have a long long term debt.
We have major cash flow issues what are the problems he names he names and Great Recession every city in California -- the Great Recession Republican state assemblyman Mike morale represents portions of San Bernardino.
He rejects Morse is perfect storm analogy.
At least the extent it suggests a series of unexpected factors came together to devastate the city but -- -- five years.
Did this train was coming down the -- That's morale preferred metaphor of freight train fueled by public employees' salaries and benefits.
And it hit town right on schedule in -- -- do you know approximately 75%.
The budget goes towards.
Fire and police officer.
Not going to be able pay those pensions nor are they going to be able to pay the salaries they hand we have historically in this city.
I've been remarkably generous -- with the labor contracts.
-- San Bernardino police sergeant made 3171000.
In -- city where the average household income is less than 40000 dollars.
But it's not just the top sellers that have brought down San Bernardino.
It's the average -- senator and you know firefighters.
Making about a 130000.
Dollars a year.
Police around 95000.
We're pretty generous pensions as well did anybody say you know -- went out to be able to afford this those.
Very problematic agreements have remained at a time when life looked -- But Morse admits it's been in good times and bad that San -- -- public unions have had a powerful influence over the politicians.
They help elect.
Moore says that's just the way it is and a blue collar city as old as we are.
Unions have a presence in terms of funding for candidates that the City Council and -- the president at the table.
During labor negotiation those negotiations in some cases have downed San Bernardino to pay employees just as much.
Even after they were time that's not work it's -- that work cannot retire people at the age of fifty years with literally full -- And bridge their health benefits until Medicare the salaries and benefits.
You're saying have to be renegotiate it -- that why does that not happen it will happen under the guidance.
-- chapter nine in other words bankruptcy court.
But public sector unions are saying not so fast they point to state precedents that suggest their pensions are untouchable.
However more as a former judge believes that in this unprecedented.
The courts will allow cities to modify at least some of their contracts.
Meanwhile he's dealing with the day to day trials.
Of -- city gone belly up.
-- you don't really have any credit and -- and you're paying cash for things with cash and carry you have vendors who've.
May try to take that equipment back.
That's had a daily thing.
We deal with the daily.
Bankruptcy in the short term.
He has the easier thing to do but the long term you effect -- conditioning housing conditions and jobs.
And that Burrell says will make things worse for the already beleaguered citizens of San Bernadine.
Where there are other options there's always options.
The city could have balanced the budget with a massive -- -- services.
When you're looking at -- city that already cut 20% of its staff.
That's a really difficult -- to make.
San -- -- modern is stick dark glass City Hall completed in 1972.
Was once -- -- this town was looking to the future.
Today however the last stop on route 66.
May be on its last let us.
Coming up the biggest local government bankruptcy in US history.
And it's not in California.
After the break.
Now the biggest local government bankruptcy of all.
Four billion dollars.
As you're about to see it took some doing greed incompetence.
And good old fashioned corruption.
To flush that much money down the drank.
-- -- -- Jefferson County Alabama.
And bankrupt to the tune of four billion dollars what words would you use.
Commissioner to to describe the financial situation Jefferson.
-- hopefuls hope Jimmy Stevens is Jefferson county's district three commissioner.
He was elected after the crisis began how did the whole -- start to go off the rails they attempted to build a Cadillac.
-- -- -- -- -- -- -- Except this is not a tale about cars.
-- -- -- the sort of mess that -- to the surface -- local politicians with big ideas get mixed up with Wall Street bankers looking for big feet.
A financial sinkhole in a swamp of corruption.
It begins back in 1996.
Jefferson sewer system was leaking raw sewage into rivers and streams and the county signed a federal consent decree to fix the problem.
The cost was huge estimated at between 250.
Million and about a billion dollars where's the -- get the money.
Undertakes it's a massive project it's.
It would include the investment banker who bought more -- day and no it was underwritten and so.
As a good enough.
At this facility alone the caddy spent more than 200 million dollars on improvements and repairs.
Guarding Jefferson County the dubious nickname of having.
The Taj a hall of sewer systems I think in a lot of ways this facility is sort of emblematic.
The problems the system have.
David Denard has been in charge of running Jefferson County sewer system since 2008.
The building that we are in now what is it what does it do.
This is up the flow -- -- it was built in 2004.
Soon thereafter problems began.
We had spent about 35 million dollars and payers -- to this building cost original.
Fifty million dollars and you had to spend 35 million dollars to prepare to put it in the regular operating -- So what did go wrong here.
The people that -- in charge of the program did not operate on a budget that used.
Local engineers to manage a problem that require a lot more expertise than let's hear some of the sewers that were.
Green light we're not even included in the consent decree how did that it was -- if you build it there will club.
In what critics call last half baked idea to raise revenues Jefferson County wanted to -- -- -- Underneath that -- -- forever to get to areas that would be developed.
But when they got to this point the outcry from environmental -- rate Payer groups was so loud they killed the project out right.
Leaving Jefferson County with that tunnel to nowhere and millions more dollars added to its already ballooning debt.
-- it became clear the county wouldn't be able to make the payments on its bonds officials went back to Wall Street looking to refinance.
So original that -- represented 2.4 billion dollars.
But 98% of that was fixed -- and -- investment bank -- where we can go to bearable right interest in.
And derivatives of that to -- -- at least make that low war.
These new instruments that Wall Street has generated.
Worse so complicated.
That the average person even a finance person could not -- him.
Tony -- Telus is the Jefferson County manager.
He -- -- those instruments executed before he came on the job exploded Jefferson county's debt without anyone realizing it.
We were overextended by 85%.
And in the folks -- insured our bonds they should have known better.
When the market crashed in 2008.
Jefferson's bonds dropped to -- allowing lenders to demand payment in full.
They -- everything in in and we were unable to pay to director of cancer death over four billion dollars whereby our largest bankruptcy.
In the history of a local government in the United States did Wall Street really take Jefferson County for here.
A federal criminal investigation of -- -- ordeal found that was the case but Wall Street got a lot of help from a number of people with their hands out.
We had -- one papal.
That either put DOT went to prison.
And there were commissioners employees and contract.
There's that included former commissioner and Birmingham mayor Larry Langford sentenced to fifteen years for accepting thousands of dollars in cash and gifts from one of the bankers.
Former commissioner Gary white ten years for accepting bribes from an engineering company that worked -- the sewer lines former commissioner Mary -- -- probation after pleading guilty to lying to the grand jury about -- she accepted former commissioner Chris McNair now serving five years for bribery and conspiracy to solicit bribes.
On the banking side.
Bond underwriter JPMorgan settled with the SEC paying the caddy fifty million dollars the SEC 25 million.
And forgiving close to 600 -- fifty million dollars in fees.
The bank alleged to have -- friends of Jefferson County commissioners.
There was definitely some malfeasance.
In that whole the whole use some swaps -- under -- but Dominic Frederico president and CEO of Assured Guaranty which -- some of the sewer bond says.
This seems that Wall Street and corrupt politicians.
Shouldn't -- Jefferson County off the hook.
I didn't vote for -- project.
They did what really steams Frederico is that current county officials -- the deal that would have avoided bankruptcy.
It basically came down to this.
Bondholders offered to -- give a little more than a billion dollars of the sewer debt if state lawmakers allowed the -- to raise taxes to help pay the rest.
Now Assured Guaranty may have to pay up.
We should work together more in my old singer enemy when -- -- your best friend for years.
At a certain point when you can't major financial obligations.
And the settlement.
Did we it was -- father away instead of closer to it we get neutral is that a cautionary tale for other candidates across this country it's absolutely is.
You've got to live within your -- Welcome back Lou Dobbs from the Fox Business Network.
Lou I interviewed the president Assured Guaranty he said that his company was going to be able to be fine even in the current environment but if there was.
A lot of the focus right.
Would it be like a domino effect in a worst case scenario if it reached contagion levels in this hypothetical.
That would be simply.
-- as always thank you.
Setting aside the implications for the national economy just how bad put -- municipal bankruptcy -- for the people who live there.
Worse than you probably imagine.
More when we return.
-- you -- town had out of control debt.
Could that actually affect your life.
You wouldn't ask -- you spend some time and Stockton California.
Like Dan Springer did.
It's been denied and that tough streets of stopping.
And you really sense the stakes for this city in the they're sick and there are -- and that nearly 300000.
Who live here.
Pretty much life and death you got a -- and I.
The officers disappear.
-- will be here.
In a heartbeat needs you want to -- back.
Since 2010 this city has had to slash a quarter of its police force because its leaders borrowed more from Wall Street that it can pay.
And promised to its unions more than it can deliver.
Police are now unable to respond to many 911 calls.
And that's -- more crimes serious crimes says mayor in Johnston what we've seen it spike in his violent crime.
And frankly in the homicide -- school.
It's a horrible thing to the C.
Fred Segal of the Manhattan institute as a written extensively about cities like stopped in going -- Stockton -- -- city in in the midst of terrible terrible social breakdown.
Not just fiscal collapse.
Of social problems and that soon it won't stop in sits in the middle of the.
Fertile farmland of California's central valley it's also an inland sea port connected to San Francisco Bay by a 78 mile deep water channel.
A navy base here -- a vibrant twentieth century blue collar economy shipbuilding steel mills and other heavy industry.
What by the 1990s.
That base and many of the factories were gone -- signature waterfront had become a place to avoid the and Johnston was on the City Council that the council and the mayor at the times have we need to fix this problem in the heart of our city.
With tax payers money and -- seemingly limitless ability to issue municipal bonds stopped and tried to spend its way back to prosperity this.
Rough and tumble honky tonk town was going to be remade.
And petrified as part of -- greater Bay Area 24 million dollars for a Minor League Baseball park.
Million for 111000 seat arena 30000.
Per slippery yacht marina and extort a new million dollar town homes.
They were very risky very expensive project out.
At the very same time you're city employees were getting extremely generous packages in paying -- benefits that's driving anybody put up there and say wait a minute we -- -- as insanity.
There is a failure in leadership.
They felt that the money would continue to roll in that property values would continue to rise and then in 2008 the stock market crashed.
Real estate prices plunged the city was suffering double digit unemployment.
At the same time property and sales tax revenue -- -- -- -- the -- moved to reduced staffs and trim salary benefit and pension packages.
The police union not only resisted.
It launched an ad campaign that Johnson to -- as a little short of a threat.
Stockton police department put up billboards which said.
Welcome to the second most dangerous city in California stop laying off cops we want something to grab their attention bill -- is the vice president of the police union what about -- blood spattered running tally.
It was to try and let them know bit.
This was going to cause more crime more Havoc and more violence in the city.
-- totally bullying when you don't have the money.
You don't have the money last February Stockton defaulted on 32 million dollars in bonds.
It declared bankruptcy the biggest US city to do so.
Meanwhile -- Folks we spoke to sense that for them life and -- -- was likely to get worse.
When we return fixing a city that's broke two democratic mayors trying to get it done.
Can they -- at all.
Now we told you about cities bankrupt.
And live shattered by folly and greed and corruption.
Can anyone turn those towns around.
Meat to democratic mayors who were trying and apparently making progress.
Even cutting union pensions and benefits.
Private sector's doing fun.
We're we're seeing weaknesses and our economy.
Have to do with state and local government both parties worry about cities going broke but they seldom agree on how to fix the problem.
Because I'm sure that the president of the United States is not getting his talking points from the big government union bosses in Washington.
The mayors on the front lines -- -- both sides of the issue.
And more democratic mayors in particular are now torn between their party's most powerful supporters.
And the realities of their city's budgets.
Says Manhattan institute -- -- The public's acting as -- up bumping up against other liberal interest.
Not money for basic services -- money for roads that certainly the case in San Jose California.
Whose democratic mayor chuck reed took office in 2007.
What role did the public sector unions.
And their contracts really play.
In your fiscal crisis.
Most of our costs were driven by increasing salaries and pension benefits those all came out of the ninety's in the go go years when we -- money can you.
Give me some idea what kind of money we're talking about the average cost for police officer for her it was 200000 dollars a year so what steps to detective.
We cut everybody's paid by 10% starting with me all the way down to hold the unions everybody for -- 10% pay cut read.
Cut city services two but that still left a 115.
Million dollar deficit.
It was time for a desperate measure or as it became known measure beat.
What exactly what.
Measure B was developed measure to allow the voters to decide whether or not we're going to continue to cut services or for gonna bring down the -- the pensions it would save the city billions over time.
But -- had to approve it first.
That was hardly a slam dunk in the county that voted 70%.
For Obama in 2008.
But Reid pushed his case hard demonizing city workers says firefighter Robert Sapient.
One of the strategies.
Was trying to convince the public.
That things were bad in the city because it board.
In some cases people have actually been costing grocery stores from the firefighters and police -- perspective have you heard these stories that they've been verbally -- abused and treated with scorn and -- -- some instances of that.
The facts or difficult and the facts are we have cut services over and over and over order the -- -- -- -- Last June despite strong union opposition 70%.
Of San Jose voters the same number that supported President Obama in no way.
Voted for measure -- Reid got his victory the same day Wisconsin's Republican governor Scott Walker easily survived a union led recall challenge.
But the San Jose Democrat.
Bristles at the comparison.
-- people tried to draw the pearl Lowe -- -- -- Tuesday in Wisconsin is not a very good analogy he says he just wants to force the unions to accept cuts.
While walker has actually curtail.
Some of their bargaining rights their solution was was much different than what we didn't -- Tuesday in San Jose we negotiated with -- unions.
Hundreds of hours and they're still an important part though what we have to deal.
In Providence, Rhode Island mayor Angel taveras another Democrat feels the same way.
He took office in 2011.
I came in to office expecting the deficit -- -- one of the magnitude.
That we found he acted quickly.
Notifying all 19134.
They could lose their jobs come summer.
Eventually he struck an agreement with the teachers union that saved almost all their jobs and tens of millions of dollars.
Taveras then approached the police and fire unions.
Got them to agree to big cuts as well -- -- I need your help -- can't do this without you.
-- -- is president of the Providence firefighters.
If you had any solutions that you think -- help please I'm I'm open to -- do almost anything.
And that was over sandwich but the unions knew they had to deal with taveras says financial author Nicole Chou Linus.
The union members have said if we don't vote for this we may get a lot worse.
If -- -- good thing so we would rather give back a little bit now -- here.
The unions have not yet come around it that way of thinking back in San Jose.
No part of measure -- will be implemented.
Instead firefighters and police have sued.
Claiming measure -- is unconstitutional.
Reid is standing firm.
What's the one thing that keeps you up at night the long term fiscal.
Impacts of these problems spend the money if you -- -- if you don't have an announcement.
We begin this hour from this spot because Wall Street is the center of modern finance.
But we end here on a different ball.
Behind me is federal hall that's where our national government first met after the constitution was ratify.
One of the framers -- this concerns was that the nation could be profoundly weakened.
If debts run up by the states were not handled in a responsible way.
Not everyone agreed about what to do then.
And yes the issues are different today.
But to core ideas of the founders still -- first out of control debt and destroying a country's ability to chart its own destiny.
Seconds and even more crucial in crisis.
The exceptional character of the American people is the most important asset we possess.
That's our program I'm Bret -- thanks a lot.
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