Obama Asks Bush To Back Aid To Automakers

Washington Post: President-Elect Pushes New Stimulus Plan During White House Meeting

(Washington Post)  This story was written by Lori Montgomery and Michael D. Shear.

---

President-elect Barack Obama yesterday urged President Bush to support immediate aid for struggling automakers and back a new stimulus package, even as congressional Democrats began drafting legislation to give the Detroit automakers quick access to $25 billion by adding them to the Treasury Department's $700 billion economic rescue program.

Bush, speaking privately to Obama during their first Oval Office meeting, repeated his administration's stand that he might support quick action on those bills if Democratic leaders drop their opposition to a Colombia trade agreement that Bush supports, according to people familiar with the discussions.

The discussions raised the stakes for a lame-duck session of Congress that could begin next week and came as fears about General Motors' financial condition yesterday pushed the company's stock price to its lowest level in about 60 years. Obama said last week that passage of the economic stimulus package and help for American car companies are his top priorities. The Bush administration has steadfastly pushed for trade deals before he leaves office.

Congress could consider the auto measure as soon as next week, when lawmakers are scheduled to return to Washington. Yesterday, in an urgent bipartisan appeal, all 15 House members and both senators from Michigan sent a letter asking the Bush administration to include the auto industry in the Treasury program on its own initiative or to work with Congress to modify the program.

"There's an urgent crisis. It's a national issue. If the administration won't act, we'll have to. But they should act," said Rep. Sander M. Levin (D-Mich.).

The entire auto industry is suffering these days, but GM has been particularly hard hit as sales have slowed and credit has tightened. Once the world's largest automaker, the company said yesterday that it was in danger of running out of cash next year. The company is taking a series of steps to conserve cash, including cutting production and laying off 5,500 more factory workers. Yet one closely followed Deutsche Bank analyst cut his forecast on GM's share price to zero, saying that even if GM manages to avert bankruptcy, "we believe that the company's future path is likely to be bankruptcy-like."

The gloomy assessment and others like it helped knock down GM's shares by nearly 23 percent, to $3.36.

So far, administration officials have resisted calls to include the Detroit automakers in the Treasury's bailout program, which was conceived to stabilize banks and other financial institutions reeling from the global credit crisis. Opening the program to the auto industry would expand the government's role in private enterprise far beyond the banking sector, and analysts warn that it could prompt a long line of companies from other industries to show up in Washington with their hands out.

Administration officials have pointed instead to $25 billion in low-interest loans recently approved by Congress as a source of quick help for the car companies. Yesterday, White House press secretary Dana Perino told reporters that the White House would be open to legislation that removes bureaucratic roadblocks slowing the release of that money.

"Congress is going to come back into town next week," Perino said. "If it wants to do anything in addition for the automakers, we'll certainly listen to ideas they have on how to accelerate the loans to viable companies."

Democrats said the loan program is intended to provide long-term assistance to the car companies to retool their factories to produce more fuel-efficient vehicles. They said it was not designed to provide urgent relief from a crisis in consumer confidence that has pushed auto sales to their lowest level in two decades.

"GM has estimated maybe they'd get a billion or two at most next year" from the previously approved loan program, Levin said. "It wouldn't provide for the infusion of capital that's absolutely necessary for them to bridge to the future."

Democrats want the Bush administration to approve an additional $25 billion in loans from the Treasury program, bringing total federal assistance to the car companies to $50 billion. In a letter sent yesterday to Treasury Secretary Henry M. Paulson Jr., Levin and other Michigan lawmakers urged Paulson "in the strongest possible terms to use your authority under the Emergency Economic Stabilization Act (EESA) or other statutes to immediately address a significant and systemic threat to the U.S. economy and provide emergency assistance to the domestic automobile industry."

Given that one of every 10 U.S. jobs depends in some way on the auto industry, the letter says, helping Detroit is "well within the broad mandate of the Treasury Department to promote stable economic growth. Given the urgency of the situation, we ask that you work with us in the coming days to provide immediate loan support to the domestic auto industry, including, if necessary," by amending the emergency stabilization act.

The letter followed a similar entreaty to Paulson over the weekend by House Speaker Nancy Pelosi (D-Calif.) and House Majority Leader Harry M. Reid (D-Nev.).

Amending the Treasury program would require action by both chambers of Congress. As of yesterday, Senate leaders planned to convene Nov. 17, but House leaders had yet to decide whether to summon lawmakers back to work. Although most House members will be in Washington next week to choose the leadership for the next Congress, retiring members and those who lost their seats on election night will not return unless Pelosi calls them back.

House leaders have said they are unlikely to convene the House for legislative business unless the Bush administration agrees to negotiate a spending package to revive the broader economy. As of yesterday, although the two sides continued to talk, there was no deal. But if the Senate approves a $61 billion economic stimulus package that the House passed in September, the House might return to work on that legislation, creating an opportunity to help the automakers.

Michigan lawmakers from both parties said failure to act would be devastating, not only to the car companies but also to the nation.

"Our nation's leaders must not turn a deaf ear toward helping the nation's automakers," Rep. Fred Upton (R-Mich.), co-chairman of the Congressional Auto Caucus, said in a written statement. "We can either stand by and do nothing, watching tens of thousands of jobs in Michigan and Middle America evaporate, or we can meet our challenges head on."

Given the vast sums of money the Bush administration has provided to Wall Street, including a rapidly growing bailout for insurance giant American International Group, Levin said the administration had no excuse not to act.

"How much are we giving AIG? $150 billion? And we're talking about $25 billion for what has been the major industry of this country," Levin said. "If there's a will, there's a way. So now it's up to the administration to respond. If they don't, we'll act."

Staff writer Kendra Marr contributed to this report.

[paidgopshill]

I can''t wait until our wages are brought into parity with Mexico and the rest of the third world, the US will then resume its rightful place as an economic powerhouse!

[jeannettelj]

TO: Indians891. You really let them have it. Good for you!!!

[deathofusa]

Yeah, Obama and Pelosi are pushing for this but then they will blame the Bush administration for bailing out automakers. Don''t do it Bush.

[hitoyou1]

ontheleft, you said workewr, how do you find one, a worker. Not at a UAW shop. No menber of any union knows what work means.

[deathofusa]

Why should the rest of us Americans have to subsidize this mentality and lifestyle? A bailout will just temporarily delay addressing the real problem.
------------------------------------------------------
Posted by indiana891 at 03:09 PM : Nov 11, 2008


Because it is the democrat way. Pay people to make pretend they are working.

[jeannettelj]

I don''t agree with bailing out the automakers. Thousands of jobs lost if they don''t? There have already been thousands of jobs lost. Where is the bailout for all these folks? I voted for Obama but I do not agree with another stimulus package. Sure the money is nice but we borrowed the last amount so folks could go to Wal-Mart and buy goods made in China. Where is the sense in that?

[hitoyou1]

indiana891, you are so right. Every thing you say is true. I have been there. The UAW is no more then scum, stealing money, yes stealing, by doing nothing and getting paid for it.

[indiana891]

Why should we subsidize expensive mediocrity for less than 1/4 of 1% of our population? I married into a UAW family and I wish that our government could hear some of the stories I%u2019ve heard about the United States auto industry. I%u2019ve heard numerous stories such as: Employees clocking in/ out for each other in order to go fishing and golfing, Employees creating %u201Csleeping areas%u201D in parts of plants to visit while on the clock, Employees breaking machines to shut down assembly lines to go home early (with pay!). Employees walking away from lines while running -- leaving parts out. I%u2019ve also been told that the elite %u201Cskilled trades%u201D spend most of their weekdays playing computer games yet work %u201Covertime%u201D to match together color coded wires and pieces of equipment. These same people are very defensive of their union jobs and act as if they are the most physically and mentally demanding job in the world!! They talk as if they were characters in Upton Sinclair%u2019s book %u201CThe Jungle!%u201D UAW employees feel entitled to make over $100,000 per year and love being laid off so they can stay at home and do nothing while making 90% of their pay. When they are of retirement age, they feel entitled to get a $70,000 buyout package + full retirement and health benefits. Why should the rest of us Americans have to subsidize this mentality and lifestyle? A bailout will just temporarily delay addressing the real problem.

[yellow651]

Great, what an honorable man. To sit in a private conversation between incoming and outgoing presidents and blab to the media what was discussed, and spin it too. The man has no class and is surrounded by equally unethical people.

[future121]

Detroit has had this coming for years with the Unions. Sorry you just can''''t pay someone $25 an hour to operate a impact wrench and then give them huge pensions and lifelong insurance. Posted by Fedup_w_pols at 12:54 PM : Nov 11, 2008

Dear Fedup-w-pols, during my 30 plus years working I was a job steward and managemnt. Have you ever worked a repetative job? Its he most boring, hardest work you can imagine. However, as managemnt, unions needs to be realistic with wants. I once saw a business close because the union was unrealistic. How can that be productive to the worker or management? Unions are needed just as balance of power in government. If either gets the upperhand then absolute power will distroy absolutely. From a long line of coal miners, steel workers and relatives who went to work at 8 years old in tile factories and coal mines--unions were a god send. What is needed is compromise and working together to get things done. Together we win. Give them aid but attach fiscal requirements and demand they compromise.

[mcapek]

If Democrats don''t want to deal with Bush, fine, let the USA automakers go belly up. I am sure Obama can take care of that problem later on. Why should Bush be helping him anyway, Obama is not his friend by any stretch of imagination.

[ontheleft]

"Overall it is supposed to create more wealth for everyone..."
Posted by melchg at 01:20 PM

No, it creates more wealth for global corporations. When the American worker tries to compete with the Chinese worker, the standard of living of the American worker will go down. It''s not rocket science.

We have shipped just about all our manufacturing base overseas, leaving us dangerously dependent on imports for the most basic things. Do global corporations care about that? Of course not. Global corporations don''t want borders and want the minimum of regulations and taxation. This is the "New World Order" that we have been moving towards for some time.

[fedup_w_pols-2009]

Detroit has had this coming for years with the Unions. Sorry you just can''t pay someone $25 an hour to operate a impact wrench and then give them huge pensions and lifelong insurance. Eventually those types of business plans are going to fail. As evidenced by well these failing businesses. Unions had a place years ago but now they are nothing but a part of the reason companies are moving out of the states. Lets see No Unions, No Corporate Taxes, No Regulations, Cheaper labor and they can still sell their wares for the same price. Yeah I can see the attraction to leave the US. Our government and other entities are essentially killing us with their policies and regulations. When a country no longer manufactures goods it is no longer going to prosper. Not only that but the money the corps make overseas stays overseas so the Uncle Sugar can''t get his grubby hands on it when brought back to the US and taxed @35%+. Tell me what incentive is there to even open a business in the US these days?

[yongamerica]

What is 25 billion when compared to Bush''s 1.2 TRILLION dollar bail out of his buddies in the banking business who were overly greedy and got caught with their pants down.

[edward1975-2009]

slownewsdaze: Have you always been this anal? Get the jist of what they are saying and move on.

[sjbj2322]

Xlib....you need to do some researh before you start blaming Democrats for all the woes of Fannie and Freddie. Start with why Cindy McCain dumped all her stock in the two so it wouldn''t make her husband look like an idiot when he came out saying that the two were in trouble. There were a whole lot of people making money from Fannie and Freddie when it appeared to be free-flowing so trying to throw stones at just one person or group is an effort in futility. Same applies to the automakers. Look at the number of people driving SUV''s. Yet Democrats or Congress are at fault? Wrong! The automakers weren''t going to change their ways as long as people were buying. It took the rise in gas prices to throw a kink in their game plan to show them the error of their ways. Now they want a handout. Then there has to be some concessions. When they are ready (as in NOW) to start producing fuel efficient vehicles, then start talking about helping them out. Better yet, why doesn''t Bush and Congress recoop some of the money wasted in helping to bail out AIG to help the automakers. Doesn''t really matter if people continue to buy SUV''s. More, more, more...there''s got to be an end to this mentality.

[missingamerica]

Fabian Socialism in action.

Posted by Xlib at 11:44 AM : Nov 11, 2008

lolll...and you should thank your lucky stars, too.

For I can see certain advantages to the strong taking what they will...like in the French Revolution, where they grabbed everybody who had manipulated themselves into positions of power and wealth, took what they had away from them, and then chopped their heads off.

[sly_64]

Biggest rip off you''ll ever invest in, in your life. An American made car. They have the technology to make these things run for 20 years, but they don''t, so they can grab your money, over and over and over.

[wardoglrs]

Bailout Obama seems to not get it. They will come back for more and more meaning you lose your value of your purchasing power every time they bail out a corp. This is killing retired people and there losing there home the Obama supporters brought in more of the same.

The only good thing is I am sure they will hold his feet to the fire But he still wont have the guts cause who could blame him hes already a full fled neo con owned by the corps a man of the Neo Elite is not a man for the many

[vsg4]

"Dems make the mess and they profit from it. Say, is fannie and freddie still handing out loans?? Is frank still making a bundle??
Yea, let''''s talk about Bush.

Posted by Xlib at 11:40 AM : Nov 11, 2008"

You mean predatory lending started in August of 2008 ? And from 2006 to now our internal debt risen from 5.7 trillions to 11.4 trillions ?

Just imagine a democratic president asking republican congress a 700 billions for bail out what would have happened and what all these so called conservatives could have called that.

Do you mean to say we had a very lean government from the past 8 years ?