Democratic Michigan Rep. Rashida Tlaib told Federal Reserve Chairman Jerome Powell that he “has the authority” to bail out the governments of Detroit and Puerto Rico.

“My city filing for bankruptcy was devastating to so many retirees, sir. Forty, 50 years they worked for the city of Detroit, saw their pensions completely diminished, gone,” Tlaib said to Powell during a House Financial Services Committee hearing.

“Do you not believe that the governments of Detroit and Puerto Rico also play a vital role that should be preserved even if a financial crisis makes it hard for them to borrow money?” she added.

Powell rejected the notion that the Federal Reserve should be in the business of bailing out bankrupt U.S. cities.

“What I believe is that it’s not a job for the Fed,” Powell said. “The Fed has a particular role and particular authorities, and lending to state and local governments, and supporting them when they’re in bankruptcy is not part of our mandate.”

That explanation did not satisfy Tlaib, who responded by saying, “We’re going to strongly disagree. I do believe you do have the authority.”

This is not the first time Tlaib has called on the Federal Reserve to rescue Detroit. Tlaib also urged Jerome Powell in July 2019 to explain why he can’t step in to help bankrupt cities across the country.

Interesting back and forth where @RashidaTlaib asks Powell that if the Fed can backstop the financial sector in a credit crisis and recession, why can't it do the same for public entities like states, cities and municipalities when they are in crisis? pic.twitter.com/t8s2slm1Uq — Mike Konczal (@rortybomb) July 10, 2019

Detroit became the largest city in American history to file for bankruptcy in 2013 after a judge decided it met the requirements to receive protection from creditors.

Four years later, Puerto Rico topped Detroit as the largest municipal bankruptcy in U.S. history with an unpaid debt of $70 billion, far exceeding Detroit's debt of $18 billion.

