Dennis Defaults

Dennis Kucinich, 32, Cleveland's boyish, impetuous mayor, was angrier than usual. "This is the politics of insanity!" he shouted at the city council in his high-pitched voice. "You participated in the murder of the city."

Not so, declared equally emotional Council President George Forbes: "If there is default, it will rest squarely on the shoulders of the mayor of Cleveland." A normally calm professional financial adviser to the city clenched his fist. "It's driving me crazy," he said. "This is a political default. It's not a question of finances." Thus Cleveland last week became the first major city since the Great Depression to default. And it did so not because the situation was beyond saving, but because the mayor, councilmen and bankers went into a tizzy of bickering.

As $15.5 million in notes came due, the city admitted it was unable to pay. Cleveland Trust Co. was the first to demand its cash. "We should put Cleveland Trust to the test and see if it is willing to destroy the city," cried Kucinich. The council refused to accept Kucinich's plan for a citywide vote on raising the city income tax from 1% to 1%%, unless the mayor would agree to raise still more money by selling the debt-ridden Municipal Light Plant to the private Cleveland Electric Illuminating Co. "I will not be blackmailed," insisted Kucinich. "When Jesus Christ went to the mountaintop and was tempted by Satan, he said, 'Begone Satan.' I say the same thing to CEI."

The city's underlying fiscal problems started well before Kucinich, who was elected a year ago and barely survived a recall election last August. Cleveland officials had long been borrowing from one special fund to pay off the obligations of another, so no one was sure how large the debt really was. Kucinich compounded the problem with more book juggling. Whatever the amount, Kucinich's plan, explained in prime-time TV last week, would only have been a short-term delaying action. Yet he made it sound deceptively tempting, claiming that suburbanites would actually pay all but 17% of the $30 million tax increase.

The mayor's foes did not buy the package, however. All day Friday, bankers, businessmen, economic consultants, the council and the mayor held meetings to try to find a compromise that would stave off default. As failure seemed imminent, Forbes offered a soothing prediction: "Come Saturday morning, the sun is going to shine, or it is going to snow." But as the city's credit rating plummets and outright bankruptcy looms, drastic cutbacks in all city services seem inevitable. Or, as Kucinich so aptly put it when a midnight deadline passed: "There will be six months of chaos for this one night of shame."

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