White House Exults in General Motors Repayment
No one was cheering louder than the White House about General Motors' repayment of $6.7 billion in loans from the federal government.
First thing this morning, Press Secretary Robert Gibbs alerted his 56,000 followers on Twitter of "BIG NEWS."
"GM pays back US $6.7 billion used to save jobs," Gibbs exulted. But he had more.
"BIGGER NEWS," he trumpeted. "Payment was 5 years ahead of schedule."
And Gibbs still had a few of his 140 characters left to link to a New York Times article about it.
Later at his daily press briefing, Gibbs didn't wait for a reporter to ask him about the GM payback. He portrayed it as a vindication of President Obama's decision to provide a federal bailout to GM and Chrysler:
"In the 12 months before the President took office, the auto industry lost nearly 40 percent of its sales volume and over 40 -- I'm sorry, lost over 400,000 jobs. Today employment in the auto industry has stabilized. Since GM exited bankruptcy in early July 2009, the industry has added 45,000 jobs."
The amount repaid by GM is less than 13 percent of the $52 billion in federal bailout funds provided to the automaker. The remainder of the bailout was converted into stock, which GM still intends to pay off. Gibbs concedes, "obviously, we're not out of the woods by any stretch of the imagination." But he thinks the payback demonstrates that GM is on a path to renewal.
Chrysler is still losing money from the time it exited bankruptcy last year, but Gibbs pointed out that the company "achieved an operating profit in the first quarter of 2010, the first quarterly operating profit since the beginning of the economic crisis."
Vice President Biden added his voice to the White House chorus, hailing the GM payback as a "huge accomplishment."
"The President of the United States took a lot of heat for that effort," said Biden of the GM bailout, saying it kept the company alive while it was transitioning.
"And I would just like to point out that I am proud to be associated with the guy who saw the necessity to do this," boasted the VP about his constitutional boss.
Biden said the rapid GM payback "exceeded our expectations."
White House economic advisor Lawrence Summers came closest to telling the critics of the bailout "we told you so," without actually using those words.
"This turnaround wasn't an accident of history," said Summers in a blog on the White House website. "It was the result of considered and politically difficult decisions made by President Obama to provide GM and Chrysler - and indeed the auto industry - a lifeline, if they could demonstrate the will to reshape their businesses and chart a path toward long-term viability without ongoing government assistance."
But the payback also gives the White House ammunition in defense of future government bailouts, should they be needed. Gibbs said it's the White House hope they won't be.
"The President wants to put into our law a series of regulations that he believes will prevent having to do that," said Gibbs. It's a reference to the financial regulatory reform legislation Mr. Obama wants Congress to enact.
Gibbs says if new "rules of the road" are passed and financial institutions behave differently, taxpayers won't be put at risk for bailouts.
"I think that's the strong goal of financial reform, and that's what the President would like to see the Senate pass," said Gibbs.
Mr. Obama makes that case tomorrow a few blocks from Wall Street, when he delivers another speech on the reform bill he wants.
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