03/29/2012 07:33 pm ET Updated Mar 30, 2012

Detroit Growth And Stability Act of 2012 Calls For $500 Million In Federal Loans

As Michigan Gov. Rick Snyder wrangled with Detroit City Council and the mayor's office over a possible consent agreement to address the city's financial challenges Thursday, Detroit's Democratic Rep. Hansen Clarke submitted his own response to the city's fiscal crisis on the floor of the U.S. House.

The Detroit Growth and Stability Act of 2012, H.R. 4308, would help the city avoid bankruptcy and meet its short-term funding obligations by providing up to $500 million dollars in federal loans. Clarke plans to send a letter to President Obama requesting his support for the legislation.

The city could run out of cash in May and is grappling with a projected budget deficit of nearly $270 million for this fiscal year and long-term obligations of $13.2 billion. If the city and state don't reach an agreement by April 5, the governor may appoint an emergency manager to take control of its operations.

On Thursday, Michigan state Republicans rejected a request from the city for additional state revenue-sharing funds. A similar response from the Republican-dominated U.S. House seems likely, but Clarke is confident his bill will find bi-partisan support in both houses of Congress.

"Everyone I've spoken to, they all see the value of keeping Detroit stable," he told The Huffington Post. "It's a symbol of the country's economic comeback."

Clarke believes half a billion dollars should be enough to shore up Detroit's short-term cash reserves and restore confidence for investors. The bill also provides funds for fixing streetlights and supporting first-responders in the police and fire departments.

Clarke said financial stability is vital not only to Detroit, but the whole region. He pointed to the Obama administration's bailout of the U.S. auto industry as an example of federal loans helping large-scale turnarounds.

"All I'm asking is for Congress and the administration to give Detroit a second chance to create the jobs it created in the past, not only for the region but for the country," Clarke said. "We've got the talent and work ethic in Detroit to create the best products sold worldwide."

Clarke said his bill would work in conjunction with any agreement worked out between the state and city government, and said he would push the bill whether those parties reach an agreement or not. Federal funds would be be administered to the city by an agent of the state, but would remain separate from any consent agreement.

Reps. John Conyers (D-Michigan), Colleen Hanabusa (D-Hawaii), Emanuel Cleaver (D-Missouri) and D.C. delegate Eleanor Holmes Norton (D) co-sponsored the bill. Notably, Michigan Democrat Rep. Gary Peters, who is running against Clarke, is not yet a cosponsor. Clarke said he needed to act quickly and that more sponsors would be added as the bill progressed.