All Blog Posts from Political Hotsheet

House Republican whip Eric Cantor is comparing the economic policies of President Obama to those of Russian Prime Minister Vladimir Putin, the Associated Press reports.

Cantor told the AP that Mr. Obama's plans for the auto industry represent governmental micromanagement and said watching the administration operate is "almost like looking at Putin's Russia."

Cantor has previously opposed the administration's role in the bankruptcy of General Motors and claimed that GM investors "had their rights trampled" by the government.

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While the Obama administration insists it will try to refrain from interfering with the day-to-day operations of General Motors, the Republican party is grabbing hold of the company’s bankruptcy to admonish President Obama for overreaching in the private sector. Meanwhile, conservative analysts say it will be all but inevitable for politics to unduly influence the company’s operations – which could impact GM's ability to become viable in a timely manner, result in unforeseen consequences for Ford and impact the greater economy.

The Republican National Committee on Monday released a web video called "Government Motors," calling Mr. Obama "our new president and CEO."

"No matter how much the President spins GM's bankruptcy as good for the economy, it is nothing more than another government grab of a private company and another handout to the union cronies who helped bankroll his presidential campaign," RNC Chairman Michael Steele said in a statement. "This is the real 'change' President Obama has in mind for America – government ownership of our economy financed with irresponsible and reckless government spending and debt and no jobs to show for it."

In fact, the president has said he would want to relinquish government-owned shares of GM back to the private sector as soon as possible – something conservative analysts say must happen at the risk of increasing political interference from both sides of the aisle.

Being a "hands-off" investor in the auto giant "is going to be very difficult, if not impossible," said James Gattuso, a senior research fellow at the conservative think tank the Heritage Foundation.

"As majority shareholder, the decision making will fall to the government, and there is intense political pressure from all sides to get involved," he said.

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President Obama this afternoon addressed the state of the U.S. auto industry and impending bankruptcy proceedings for Chrysler.

The president struck a populist note in criticizing "a group of investment firms and hedge funds [who] decided to hold out for the prospect of an unjustified taxpayer-funded bailout."

"They were hoping that everybody else would make sacrifices, and they would have to make none," he said. "Some demanded twice the return that other lenders were getting. I don't stand with them."

"I stand with Chrysler's employees and their families and communities," he continued. "I stand with Chrysler's management, its dealers, and its suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars. I don't stand with those who held out when everybody else is making sacrifices."

The president's full remarks, as provided by the White House, are below.

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President Obama during his prime time news conference Wednesday night said he is hopeful Chrysler will remain a viable company--and that the federal government will be able to remove itself from the auto industry.

"I don't want to run auto companies, and I don't want to run banks," Mr. Obama said. "I've got two wars I've got to run already--I've got more than enough to do."

Chrysler faces a government-imposed deadline to finalize a partnership with Fiat SpA by this Thursday.

"I am more hopeful than I was 30 days ago that we can see a resolution," Mr. Obama said with respect to the deal, though he noted that the "clock is ticking."

The president said deals reached with Chrysler's major debtholders and sacrifices from labor unions improved the automaker's outlook for survival.

"The details have not yet been finalized, but I'm feeling more optimistic than I was about the possibilities of that getting done," Mr. Obama said.

He said, however, that it was "prudent" for Chrysler to prepare contingency plans, including filing for bankruptcy. Given the concessions made by debtholders, Mr. Obama said, it would be likely the company could emerge from bankruptcy proptection quickly.

The president said he saw potential in companies like General Motors, in spite of the fact that the current recession simply added onto the problems faced by an already-weak industry.

"I've always said GM has a lot of good products, and if they can get through these difficult times, they can emerge a strong, competitive viable company," he said.

Mr. Obama also added he would like to see the government extracted from auto business as quickly as possible. It is his responsiblity, he said, to ensure taxpayer dollars "are aimed not at short-term fixes that continue these companies as wards of the state."

He added that workers, as well as company stakeholders, will benefit from the government's assistance in the industry.

"We're going to be coming behind whatever plan is in place to make sure the federal government is providing as much assistance as it can to make sure people are landing back on their feet as we strengthen core businesses," he said.

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Appearing on CBS' The Early Show this morning, Sen. Christopher Dodd (D-Conn.) discussed the announcements that General Motors and Chrysler are moving closer to bankruptcy filings in the coming weeks. The banking committee chair said he hopes the two car companies will be reorganized, rather than liquidated.

"Reorganization, while no one likes that option, it may be the best option to retain a strong auto industry in the 21st century for our nation," said Dodd. "I wish we had different results but the realities are what they are."

The Senate veteran, whose approval numbers have cratered in recent months, was hopeful that President Obama's calls to stop credit card abuses will lead to meaningful legislation. He said that though previous efforts address the problem have withered under intense lobbying by credit card companies, this time he believes that popular support is on the side of reform.

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On his seventieth day in office, President Obama laid out a plan for General Motors and Chrysler that gave both companies a limited about of time to restructure if they hope to secure further federal funding.

"I am announcing that my administration will offer GM and Chrysler a limited period of time to work with creditors, unions, and other stakeholders to fundamentally restructure in a way that would justify an investment of additional tax dollars; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success," he said.

The president also signed a wilderness protection bill setting aside more than 2 million acres "to protect, preserve and pass down our nation's most treasured landscapes to future generations."

Check out Chip Reid's CBS Evening News report on the president's day below.

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This post was written by Igor Kossov.

President Obama recently appointed an auto task force to oversee the restructuring of the U.S. auto industry.

However, most of these American transportation team members drive imported cars, the Detroit News reports.

Treasury Secretary Timothy Geithner, who is in charge of enforcing loan agreements with GM and Chrysler, drives an Acura. White House National Economic Council Director Lawrence Summers, left, has a 1995 Mazda Protégé.

Of the eight task force members and their 10 policy aides, only two own domestic cars. Despite the controversial "Buy American" clause in the recently signed stimulus package, the market for overseas automotives seems alive and well for top policymakers.

A full list of the task force members' vehicles is available here.

Ohio Gov. Ted Strickland said today that a collapse of one of the "Big Three" American car companies would not only effect the other two, but would also have a huge impact on foreign car makers, too.

"It will impact all auto companies -- including Honda and Toyota and all the others -- because they have the same supply network," Stickland, a Democrat, said on CBS News' Face The Nation. "This supply chain is very fragile, and if it starts to collapse it could have a cascading effect that could quite frankly cripple an industry that has been so vital to the economy of our entire nation for so long. So it's very important that the auto industry gets the help it needs to survive."

Strickland also told host Bob Schieffer about conversations he's had with officials from Honda about the problems facing General Motors, Chrysler and Ford.

"I've had officials from the Honda corporation come to me, say to me, 'Governor, we're not usually in the business of advocating for our competitors, but it is so important that the auto industry and the big three be preserved.'"

Below is the transcript of President George W. Bush's announcement on the auto bailout, as released by the White House:



9:01 A.M. EST

THE PRESIDENT: Good morning. For years, America's automakers have faced serious challenges — burdensome costs, a shrinking share of the market, and declining profits. In recent months, the global financial crisis has made these challenges even more severe. Now some U.S. auto executives say that their companies are nearing collapse — and that the only way they can buy time to restructure is with help from the federal government.

This is a difficult situation that involves fundamental questions about the proper role of government. On the one hand, government has a responsibility not to undermine the private enterprise system. On the other hand, government has a responsibility to safeguard the broader health and stability of our economy.

Addressing the challenges in the auto industry requires us to balance these two responsibilities. If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers. Under ordinary economic circumstances, I would say this is the price that failed companies must pay — and I would not favor intervening to prevent the automakers from going out of business.

But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action. The question is how we can best give it a chance to succeed. Some argue the wisest path is to allow the auto companies to reorganize through Chapter 11 provisions of our bankruptcy laws — and provide federal loans to keep them operating while they try to restructure under the supervision of a bankruptcy court. But given the current state of the auto industry and the economy, Chapter 11 is unlikely to work for American automakers at this time.

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