Published January 26, 2017
This is a rush transcript from "Your World," September 27, 2013. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: Motown is getting millions. White House officials in Detroit today detailing their plan to help the city through its bankruptcy. They're offering up to $300 million in what they're calling aid and not bailout.
But Colorado Treasurer Walker Stapleton fears it's the start of one.
First of all, what I found was amazing, Walker, is I didn't know we had any money to give out. So they must have looked under some couch cushions. But what do you make of this?
WALKER STAPLETON , R-COLORADO STATE TREASURER: That's exactly right, Neil. The question to be asked is that the American taxpayer, who is watching your show today, what does he or she get out of a bailout of Detroit? And the answer to that question is, absolutely nothing.
CAVUTO: But, now, again, again, again, Walker, they say no bailout. This is $300 million, maybe strategic investments and the like. You say what?
STAPLETON: But what I say is that this establishes an awfully bad precedent.
Are we going to get back to a Lehman Brothers framework of too big to fail here and picking winners and losers amongst our cities and our states? And we're actually -- what the federal government do -- is doing here is it's creating a culture of it being OK to mismanage your books. They're institute a culture of financial mismanagement at our city and state level.
There's plenty of states such as Florida and Wisconsin and Texas that have done a great job of properly funding their retirement systems. What happens to them? Where is their bailout money? Why bail out Detroit? The taxpayer has nothing but pain and a trail of tears when the federal government steps in and offers money that it simply doesn't have and cannot afford to have in order to reward Detroit for fiscal mismanagement.
CAVUTO: Walker, I began looking at this and started saying, give the benefit of the doubt here and just follow this analogy that it's not going to be a bailout, not going lead to a bailout.
And I know of -- I'm sorry -- 18 U.S. cities that are right now on the brink, that are in a world of hurt. Chicago comes to mind. L.A. comes to mind, a host of others. Let's say each one of them required this sort of $300 million get through the hump sort of thing. Well, you can do the math here. And if it sets up an expectation that the city, the district, the municipality, what have you, would have Uncle Sam sort of helping them along the way as they try to get, get, get up on their feet, then there will be established an expectation that this sort of thing -- that the government has my back, right?
STAPLETON: Well, you're exactly -- you're exactly right, Neil.
This is not just about Detroit. This is about Central Falls, Rhode Island, Jefferson County, Alabama, Chicago, Atlanta, San Bernardino, Stockton, California. This is happening all over our country right now.
And the crazy thing about this, Neil, is that we don't even know the extent of the liabilities. For instance, in Detroit's case, they had to bring in forensic accountants and new actuaries who actually starting implying different financial assumptions. As a result of them doing that, they found out that Detroit was an extra $3.5 billion in the hole than even Detroit had admitted to.
We're talking about trillions and trillions of dollars of extra debt here that the federal government may take on and put on the backs of taxpayers at a time when they're already drowning in debt and we're having this debt ceiling discussion of -- of -- of whether we're going to extend the debt ceiling. It's just craziness.
CAVUTO: Walker Stapleton, thank you very, very much.
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