Nov. 11, 2008
Obama Asks Bush To Back Aid To Automakers
Washington Post: President-Elect Pushes New Stimulus Plan During White House Meeting
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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.
By Lori Montgomery and Michael D. Shear
© 2008 The Washington Post Company
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See all 84 CommentsNOT!
WE WILL TOO.
We need leadership and direction, not finger-in-the-*** handouts.
When the government become involve in education, we fell behind the rest of the world. The government become involve with welfare, more people went onto welfare. When the government got involved farm subsidies, prices went up. When the government started raising minimum wage, inflation went up faster.
WE WILL TOO.
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Posted by CPelzar at 09:47 AM : Nov 11, 2008
We cannot compete because of the union! Overbloated wages and benefits are not allowing automakers to be competitive in the world economy. The UAW should have prepared their supporters for lower wages and benefits instead of ramming their demands up GM''s
b utt. The union should have shouted to the rooftops, "a lower wage job is better than no job at all", but they didn''t the greedy pigs.
If U.S. automakers get bailout money it should be conditional that they come up with a viable plan to turn themselves around and pay the government back.
Otherwise this would just be throwing money away.
The domestic industry is in trouble because Ford and GM now make only SUVs and trucks that waste gas and fall apart.
If there are issues with health care costs, let''s fix health care. That''s not GM''s, or the workers'', fault.
I agree, add conditions to these bailouts. If they can''t regulate themselves...
I won''t say much about unions, which aren''t the core problem anyway -- and there are plenty of genuine ways to get those union exec crooks to lose their necessity either. They gave us the 40 hour work week, paid vacations, and so on, but others have raised good points about their dues, thieving of their own, and other arguable talking points.
Dow down over 240 points, the Obama''''s Firesell" continues!!! No bailout for Ford, GM or Chrsyler, let them all go oversea to China and get that "makeover" they need to compete in the GLOBAL Market!!!
Posted by scb1111_1 at 10:11 AM : Nov 11, 2008
Obama''s not even the President yet. I know you''re anxious but don''t you think it''s a little early to be blaming Bush''s failures on him?
When the government become involve in education, we fell behind the rest of the world. The government become involve with welfare, more people went onto welfare. When the government got involved farm subsidies, prices went up. When the government started raising minimum wage, inflation went up faster.
Posted by danielle_mom at 09:56 AM : Nov 11, 2008
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Well, you can go hungry. The farmers aren''t the problem...
Regarding colleges, it''s disgusting how tuition costs skyrocket every year - the students shouldn''t have to paid for "principal greed", no pun intended...
As for hospitals, $30 for one aspirin tablet is ludicrous too. Or the $20 sheet of tissue to sneeze on. Some fees are legitimate. It''d be cheaper to smuggle in a bottle of Tylenol and a box of Kleenex for crying out loud...
This is the first issue I do not agree with Obama on! What, are we going to bail out the whole country now over everything? There has to be a limit!!
Posted by adek1 at 10:14 AM : Nov 11, 2008
The federal government has, for the last 8 years, taken a anything goes approach to overseeing industries that are the lifeblood of our economy. We have no choice but to bailout the auto industry. But we can set conditions that guarantee the money isn''t wasted.
In short, that Republican S.O.B. puts Colombia''s jobs - and citizens - before Americans, because that approaches puts the most profits in the pockets of his core constituency.
That S.O.B. is about as American as Fidel is.
Top executives need to be earning much more realistic salaries. These execs earn Millions, that is not right. I work for the phone company who''''s CEO earns Millions. The company has a "Cash Issue"now and Management has gone through a 50% force reduction within the last 5 years or so because business is not good and competition is tight. However Our CEO does not take a reduction in pay or not even offer not to take a bonus which is also in the Millions. Preferring instead to throw good workers out in the street and onto the unemployment line. BTW, he also had the nerve to donate $14 Million to Pace University, while claiming the company has a cash crisis and continuing with a force reduction. This type of attitude and selfish manner of running a business is what is getting all US companies in the mess we are in now.
Posted by josebcruz at 10:16 AM : Nov 11, 2008
+ report abuse
Good point! The executives that wreck these companies get millions in salary in bonuses regardless of whether they run them into the ground or not.
China sees NO growth in the American Economy under an Obama administration for the next four years!!! The Chinese government infused %586 billions into their financial system to firm up their economy!!!
Posted by scb1111_1 at 10:18 AM : Nov 11, 2008
+ report abuse
Bush is still the President. I know you''re anxious but don''t you think it''s a little early to be blaming his failures on Obama?
lol!
DHL, was holding on in hopes that McCain would get elected. Now that Obama is elected they are cutting 9500 jobs...
Posted by mr22587 at 10:21 AM : Nov 11, 2008
+ report abuse
Omama''s not even the President yet. Don''t you think it''s a little early to be blaming Bush''s failures on him?
lol!
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Yawn. Tell us again how McCain raced back to Washington to beg for a socialist bailout.
Posted by FloydZeppd
He was setup by Pelosi and Reid with the help of the drive by media and the RINOs in his own party!
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Would you drive a car built in China? They have no unions, manufacturing is done by and large with slave labor (so I''m told), and with melamine, lead, components of antifreeze, and so on in their product, you would prefer their contribution to the "global economy"?
Note, their lack of regulations is why they have gotten away with producing inferior or toxic products. I highly doubt anything sinister is really going on.
Posted by scb1111_1 at 10:24 AM : Nov 11, 2008
Hey, genius: Which one is paying taxes, the one making $10 an hour or the one making $30 an hour?
You guys are so intent on crushing the American worker that you don''t even see the stupidity of the things that you type.
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DHL is staying - they are doing US-to-other-countries. They are ceasing US-US operations and discussing those operations with FedEx and UPS.
It''s been said Dell is dropping DHL in 2009 -- I bet if Dell ditched ''em in 2008, DHS would have canned US-US operations in 2007. Dell was, so I''d read, their biggest customer. Easy to see why, Dell makes items that break down more frequently than any Ford I''ve ever driven... and they''re not made in the US either.
It''s about the cheapest costs; nothing more. Which is why we''ve so much waste; everything is so shoddily built...
http://www.youtube.com/watch?v=Zj-vIOMtVY0
Posted by scb1111_1 at 10:24 AM : Nov 11, 2008
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Why not pay good workers $30/hr and then laugh at unions until they disintegrate out of embarrassment; the workers no longer needing to pay dues - more money for them?
Indeed, those good workers getting good wages for good work would in turn put that money back into the economy. Good workers at $10/hr would have enough time staying alive and would be less inclined to remain good workers, or find another company that pays more -- the 1990s, as a flip side, workers did jump from job to job when the job they left paid less. It''s the inverse of today''s situation where "if it costs less, regardless of quality, do it".
http://www.youtube.com/watch?v=Zj-vIOMtVY0
Posted by scb1111_1 at 10:29 AM : Nov 11, 2008
lolll...gee, what makes me think your royalty payment from the well heads on your property have a lot to do with your politics...
Or you work for Big Oil directly...
lolllll.....
Posted by libertarian5 at 10:30 AM : Nov 11, 2008
Same in Pennsylvania...I sorta don''t like deliveries that go to the wrong house and get left on the porch in the rain because nobody lived there to start with.
Posted by ibsteve2u at 10:25 AM : Nov 11, 2008
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The ramifications so far, by ditching America''s workers*, showing that the economy is in jeopardy and the same corporations are begging the government for welfare. On top of existing "government subsidy" too, I would guess/assume/presume/whatever.
* (at least the good ones and I won''t say there isn''t a problem on the worker side either but that''s another conversation)
It''s silly to think that bailout money will go toward making more SUV''s, GM has learned this lesson with car dealerships full of them. A bailout should be for retooling and producing smaller vehicles. The infrastructure is not ready for alternative vehicles yet, so mass producing said cars is not viable.
Also, let''s not forget the consumer who gobbled up SUV''s and led the automakers to produce more. Gas went up and we all did an about face on the cars we wanted. GM deserves the chance to make the changeover and get out the products we need. This bailout should be about doing this and not about paying retirees their benefits that were overblown in the first place, let them receive the same kind of benefits that the rest of us have and the UAW can bite me because I''m sick of their unrealistic tactics.
Posted by mr22587 at 10:31 AM : Nov 11, 2008
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Prove it.
Posted by FloydZeppd at 10:32 AM : Nov 11, 2008
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Agreed. But if they can recall governors from crackpot states teetering next to an ocean of seismic proportions (that''s riddle-speak for California), then surely presidents can be recalled too?
Posted by Hypnotoad72 at 10:33 AM : Nov 11, 2008
I couldn''t agree more...It amazes me that the right continues to point the finger at the American worker for the failure of the American economy when in fact the economy is failing because income got pushed to the top - where it sits or leaves for investment offshore - while jobs disappear at the bottom.
The right REFUSES to accept the fact that the American worker IS the American consumer, and by attacking the jobs and wages of the American worker they cut the nutz off of the American economy.
Greed makes the right extraordinarily stupid.
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Posted by scb1111_1 at 10:35 AM : Nov 11, 2008
Then we can buy a new car at Wal-Mart.
Posted by Hypnotoad72 at 10:34 AM : Nov 11, 2008
Guess you were in Gov Palin''s government class?
Posted by libertarian5 at 10:37 AM : Nov 11, 2008
lolll...in China, the stores say "Wal*Mart", with a nice red star in the middle.
I would not be surprised to see that show up in the U.S. of A., because everything Wal*Mart does primarily benefits China to the disavantage of the U.S. manufacturer and worker.
Posted by scb1111_1 at 10:35 AM : Nov 11, 2008
There is the measure of how patriotic "the right" is...they would relocate our ability to make war material to China, if it put more money in their pocket.
I live in Michigan and have seen first hand how the UAW works and how their members milked the system for all it was worth. No line worker should be making up to 80,000 a year. Heck, my husband is a financial controller/CPA and is in the mid 80''s. Why should line workers with no degrees or training make wages comparable to those who have paid their dues. Most salaried individuals I know work ungodly hours for the betterment of the company. Union workers are spendthrifts with all sorts of toys, big guts, and drinking/smoking problems. Take a look at UAW strikers and you''ll see that they all need motorized wheelchairs as they picket for more money. GM has gone to China for the huge market there and Japan is producing cars just fine without a "union" to drag them down. My husband was a senior accountant for a Japanese supplier, the shop floor workers had lower wages but good benefits. American workers want "everything" even if the company has hit the skids. I can''t stand unions.
Also, this country is too modern to allow safety hazards to happen during the production of cars, unions are just not necessary anymore. We have lawyers today that can see to any injustice and the media can blow up a story in an instant so it is highly unlikely that a manufacturer could get away with anything that hurts the employee anyway.
Posted by promaclaura
Every time I have to go home after a forty hour work week or sit home on Labor Day I just seethe. Those lazy liberals have ruined this country.
Also, this country is too modern to allow safety hazards to happen during the production of cars, unions are just not necessary anymore.
Posted by promaclaura at 10:47 AM : Nov 11, 2008
You fail to take into consideration possibilities like this President, who is using "executive orders" in an attempt to gut existing environmental laws before he leaves office.
The exact same tactic can be used against labor and worker safety laws, negating your claim that we "are too modern". ALL of that presumes the rule of law, and the corporations, their CEOs, and Republicans in general hold that laws and regulations are burdens that restrict profits and so should be eliminated.
And I would suggest your husband go work "the line"...I have two degrees, and now do not go anywhere near a manufacturing line, but I assure you that operating a computer is easier as an accountant in its own way than "the line" is.
Plus, your life rides on that autoworker getting it right the first time, every time.
The same cannot be said for the output of your husband''s efforts.
Time to reorganize and to change our philisophical attitudes towards glorifying the "businessman" for they are only moved by greed and power. Oversight is required not the Republican view of lets have the fat cats get rich....nothing ever trickles down as history once again so clearly shows Capitalism when unbridled has its own deadly flaws.
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Typical RINO. Blame everybody else but themselves.
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Posted by FloydZeppd at 10:50 AM : Nov 11, 2008
I know exactly what I''m talking about as I am in the thick of it. With a husband and family members employed by automaker suppliers we have seen the UAW''s sick gluttony. None of my family are union members and we resent watching these companies go down as the UAW demands more. Bailout money for retirees that enjoy out of this world health benefits? No way, they have got their share and then some. If the UAW cared about this country they would join reality with the rest of us and stop expecting the world on a platter.
ps Nobody argues that CEO''s make too much and that a failed company means no goodies for them, but their are many executives that have given all and worked endless hours on a SALARY pay. Union people punch out and do nothing over and above for the betterment of the company, just the betterment of the union.
Posted by scb1111_1 at 10:58 AM : Nov 11, 2008
lolll...paying a CEO 400 times average worker pay is a G.D. waste of money, and is only possible because they serve on each other''s boards of directors and so can set each other''s salary.
CEOs have robbery down to an art form...
Posted by FloydZeppd
*Yawn* Why don''t you go find your messiahs agenda, it seems to have vanished off of his webpage.
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