Uphill climb for Big 3 bailout
Published 7:26 pm Thursday, November 13, 2008
WASHINGTON — Congressional Democrats pushed forward Thursday with a rescue package to pump $25 billion in new emergency loans into U.S. automakers, but a top senator said the package lacked the support to pass.
Senior Democrats are drafting legislation that would carve out part of the $700 billion Wall Street bailout for loans to the three major U.S. auto companies in exchange for a government ownership stake in the companies. They hope to push the measure through during a postelection session of Congress next week.
But the idea is running into resistance from congressional Republicans and President George W. Bush, who are reluctant to back any additional money for the struggling auto industry.
“Right now, I don’t think there are the votes. I don’t know of a single Republican who’s willing to support” the auto bailout, said Sen. Chris Dodd, D-Conn., the chairman of the Senate Banking Committee. Dodd, who said he personally backed the idea, cautioned against “bringing up a proposition that might fail,” and appeared to suggest that Congress wait until President-elect Barack Obama is sworn in on Jan. 20 to provide further help to the carmakers.
The financial industry bailout already gives the government power to help the auto industry, Dodd said, and “under an Obama administration, there seems to be a greater willingness to deal with the issue.”
He said his panel would hold hearings early next week on an auto bailout.
Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, and Sen. Carl Levin, D-Mich., meanwhile, are working on a loan package as General Motors Corp., Ford Motor Co. and Chrysler LLC lobby feverishly for Congress to approve the aid, citing an economic downturn that has choked off auto sales and frozen credit.
GM, the nation’s largest automaker, posted a $2.5 billion quarterly loss Friday and has predicted it could run out of cash by the end of the year without government help.
“The reason why the autos are in this challenge is because of the meltdown in the financial market,” Michigan Gov. Jennifer Granholm said. “They were on a restructuring path — yes, they were challenged — but this has utterly kicked them in the gut and is strangling them because they can’t borrow money.”
House Republican leader John Boehner of Ohio said Thursday he would oppose any bailout help. “Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers’ competitiveness around the world is neither fair to taxpayers nor sound fiscal policy,” he said.
