Retirees’ Medical Bills Are Bringing Down Detroit

The emergency manager in charge of keeping Detroit afloat says the city’s $20 billion debt load can’t be reduced to manageable levels without “shared sacrifice” from all stakeholders, including retirees.

Pension and retiree-health-care obligations make up the bulk of the city’s unsecured debt, and their costs are rising rapidly. The emergency manager, Kevyn Orr, is right that Detroit must reduce its retirement-related debt to secure its future, but he has to be more specific about his target. Cutting retiree health care -- also referred to as “other post-employment benefits,” or OPEBs -- should take priority over pensions.