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Beltway Confidential

Meet the slush funds Obama used to bail out Detroit

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Beltway Confidential,Conn Carroll,Senate,Detroit,Rand Paul,Syria,Detroit Free Press

White House National Economic Council Director Gene Sperling and three other top Obama administration officials will travel to Detroit on Friday, where they will announce more than $200 million in federal bailout funds for the bankrupt city.

According to the Detroit Free Press, Sperling "wasn't immediately able to break down" exactly how much of the money awarded represents "new funding" for Detroit, but he did say "much of it represented an effort by administration officials to scour their departments for funding that Detroit could access."

In other words, this is all the cash Obama could scrape together after looking for spare change in between the couch cushions of the federal government. Specifically, the Free Press reports Detroit will get:

-$65 million in Community Development Block Grant funding

-$100 million in federal transit grants

-$25 million to hire firefighters and purchase firefighting equipment

All of these are waste-ridden programs that should have been eliminated years ago (here is Cato on CDBG, Heritage on transit programs and Heritage on fire grants).

House conservatives have tried to eliminate or cut each of these programs, but moderate Republicans have sided with Democrats to preserve them each time. Most recently, moderate Republicans voted with Democrats to kill a House transportation and housing appropriations bill that would have made deep cuts to the CDBG program in particular. Politico reported this August:

With support collapsing, a $44.1 billion transportation and housing bill was pulled abruptly from the House floor Wednesday, and top Republicans conceded it was a further sign that the party’s budget strategy is unraveling. ...

Republican moderates of the Tuesday Group were among those most upset with the level of cuts. And while $350 million was restored Tuesday night to soften the reductions from popular community development block grants, the combination of these moderate defections plus a predictable bloc of conservatives who oppose most appropriations bills was fatal.

So if you want to know why Obama can suddenly find an extra $200 million to bail out Detroit in a time of sequestration and supposed austerity, blame moderate Republicans who vote like Democrats when it comes to spending.

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