White House Calls For Automaker Loans

Administration Wants Previous Loans Accelerated For Industry, But Senate Dems Want To Use Part Of $700B Bank Bailout

(AP)  The White House on Friday threw its support behind a plan to speed release of $25 billion in existing loans to the Big Three automakers but rejected a Democratic proposal to use money from a financial bailout to help the troubled industry.

The $700 billion financial rescue package was never intended to help automakers and shouldn't be now, White House spokeswoman Dana Perino told The Associated Press. But since Democratic leaders in Congress are pressing forward with a proposal to carve out a piece of its for the auto industry, she said the White House has decided to pursue a different approach: accelerating the availability of federal loans Congress first approved in September.

Those loans were approved to help automakers build more fuel-efficient vehicles and become more competitive companies in the global marketplace. The administration now supports allowing the loans to be released more quickly than the original legislation prescribed and to be used for more urgent purposes as the companies struggle to stay afloat.

"Democrats are choosing a path that would only lead to partisan gridlock," she said. "We are now actively calling on Congress to amend the loan program."

Earlier Friday, Senate Majority Leader Harry Reid said that the Senate will take up a bill to extend $25 billion in emergency loans to the auto industry on Monday and plan a test vote on it two days later.

That bill would carve out part of the $700 billion Wall Street bailout for loans to the three major U.S. auto companies. The measure would provide for the government to hold some kind of ownership stake in the companies for the duration of the loan to ensure that taxpayers shared in any gain and would ultimately be reimbursed.

But supporters were scrambling for votes to break an expected filibuster by opponents. They expect to need between a dozen and 15 GOP votes to attach the measure to a $6 billion bill the House passed in October that would extend jobless benefits. So far, however, they had only one firm commitment, from Sen. George Voinovich of Ohio, a state with several auto plants and manufacturers of auto supplies.

"Right now, I don't think there are the votes" for the auto rescue, Sen. Chris Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee, said Thursday.

But Sen. Carl M. Levin, D-Mich., an architect of the carmaker aid, said he was "confident that there will be bipartisan support for legislation to support the U.S. auto industry."

Reid, D-Nev., rejected Dodd's suggestion to wait until next year when Democrats will have bigger majorities in the House and Senate as well as Barack Obama in the White House.

But Jim Manley, Reid's spokesman, noted Thursday night that nothing can be done without the agreement of Senate Republicans.

Citing an economic downturn that has choked off sales and frozen credit, General Motors Corp., Ford Motor Co. and Chrysler LLC are lobbying feverishly for Congress to approve the aid.

Senate Republican leader Mitch McConnell of Kentucky - home to General Motors and Ford plants - has been noncommittal about new aid. His office says Congress should instead revise a $25 billion loan program it approved last month to speed the release of the money, which is designed to help automakers develop more fuel-efficient vehicles. This is the idea endorsed by the White House and Treasury Secretary Henry Paulson.

With feelings still raw from the election and the public dismayed by the Wall Street rescue, the auto proposal remains a tough sell. Some Senate Republicans are skeptical the aid would lead to changes by the companies that could make them viable in the long run. But several states with Republican senators have Detroit Three auto factories.

"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," House Republican Leader John Boehner of Ohio, said in announcing his opposition to the measure.

Supporters of the auto bailout are targeting lawmakers who represent states with auto plants and auto suppliers, as well as Republicans in states with high unemployment rates.

Sen. Kit Bond of Missouri, R-Mo., left open the possibility that he could be persuaded to back a carmaker rescue. "While I have real concerns with another taxpayer funded bailout, there are also thousands of workers in Missouri whose jobs are on the line so the devil will be in the details," Bond said in a statement.

Democrats would have no problem passing the bill in the House, where they have a much larger majority than the narrow 50-49 one they will have in the Senate once President-elect Barack Obama resigns on Monday. But Speaker Nancy Pelosi, D-Calif., has been reluctant to convene a formal session until she is sure the measure will pass the Senate.

Lawmakers in both houses will be in Washington next week to reorganize their leadership teams and committee assignments for the 111th Congress that will convene on Jan. 3.

The bill Democrats are writing would insert the government squarely into the car companies' operations. It would require that the companies submit a plan for long-term viability in exchange for the loans, share a portion of future profits with the government and reimburse taxpayers before any other shareholder, according to aides familiar with it.

"We certainly want to make sure that there's a plan how are you going to get out of this mess," said Sen. Charles E. Schumer, D-N.Y.

The car companies also would face tougher restrictions on pay for their executives and dividends for their shareholders than did the financial companies that got a piece of the original bailout.

[rbmshow]

NO MORE BAILOUTS PERIOD!

#DONTGO

http://www.youtube.com/watch?v=Tbp3fu58mbg

[treknutz]

First no then yes....anyone get the feeling that the White House advisors are like a bunch of "paranoid schizophrenics alternating with delusions of grandure?"

(Dom Deluise from the movie "The End")

[jsd330]

Why does the big three need a bailout? Just look at all of the imports on the roads, in shopping center parking lots. Try buying an american made car in a foriegn country and look at the restrictions and import taxes on it. The foreign governments subsidise their auto makers ,so they can sell their cars cheaper in the U.S. And when you buy an import where does most of the profit go? Back to that country. Talk about unfair trade.The unions are only asking for their fair share of the pie. Check the automakers upper managements salary and benefits packages. Corporate jets, country club memberships,free vacations ,enormous pension packages,stock options These are the ones to blame.How many vice presidents do these companys need? The U.S. government only has 1.

[mikezembill]

JUST DO NOT GIVE ANY MORE LOANS TO ANYONE AND IT ALL GO TO HELL I WAS NOT FOR THE 700 BILLION DO NOT TAKE MY MONEY AND GIVE IT TO ANY OF THE BANKS PIS$ ON THEM LET THEM GO BELLY UP.

[mikezembill]

If we cant help the auto makers then just do not loan anyone money to anyone.

[mikezembill]

We need to give them 200 billion at the start and any more they might need hell why not. Maby we can keep the republicans from stealing it all.

[wheear]

This Article reads:White House Calls For Automaker Loans Administration Wants Previous Loans Accelerated For Industry, But Senate Dems Want To Use Part Of $700B Bank Bailout

Posted by CPelzar wrote: This is what to expect from Obama and Dem Legislature.

I write: Is that you in hiding Rush ?

[yeswecan2]

When will all of these bail outs end? Lately, in the area that I am from, I do not see a lot of people driving new cars. Give some of this money to the American people. We are the ones along with our children and grandchildren will be paying all of this money back anyway. We are going to be a socialist country!

[jf94066]

NO...No...NO!!!

[perk235]

Interesting that they have shifted so quickly on this one. Are we truly on the verge of Great Depression II?

Remember that the airlines were bailed out with $15 billion right after 9/11.

These derivatives (credit default swaps) have really ruined the world.

[aceshigh333-2009]

Big mistake... whats next Mc Donalds ??? KFC ???

If we give them money (big 3) then they must operate like a business running for profit. Unions need to back off and let the business survive. Regulators need to back off and let the business survive and be competitive. Unions are good for what they were ment to do but unions can also choke a company to death

[cpelzar--2008]

These blogs are running 10 to 1 against a bailout for the US automakers and YET, the House and Senate seem determined to do exactly the opposite. Who in the hell do they represent???
*****

Obviously, just themselves and their cronies. This administration factored citizens out of almost everything....it''''s been their own little boy''''s club for years. The population weighs in on very little these days...and I doubt any of the legislators and senators have much of an idea (or even care) what their constituents want. I hope Obama changes that and FAST.

Posted by brucestevens at 05:44 PM : Nov 14, 2008

Are you kidding me, this is driven by Congress and Obama, This Administration going along with it is meaningless, they are leaving.

This is what to expect from Obama and Dem Legislature.

[dbstevens]

These blogs are running 10 to 1 against a bailout for the US automakers and YET, the House and Senate seem determined to do exactly the opposite. Who in the hell do they represent???
*****

Obviously, just themselves and their cronies. This administration factored citizens out of almost everything....it''s been their own little boy''s club for years. The population weighs in on very little these days...and I doubt any of the legislators and senators have much of an idea (or even care) what their constituents want. I hope Obama changes that and FAST.

[cpelzar--2008]

Go to your Congressman and Senators web page and tell them NO.............

I do not know anyone other than the companies themselves and the god *** UAW that wants this.

[dbstevens]

I think that in order to keep this economy going they need to give the 700 billion bail-out to the tax payers and pay off all of our debts.

Posted by l010674
-------------

I second that motion!!!

[dbstevens]

They can''t just keep making up money. You don''t pull it out of thin air. But if they DO bail out the auto industry, they BETTER stick to the requirement that this money be used for more fuel efficient vehicles, and not just 4 or 5 more miles per gallon. Cars are one of the most destructive forces in our environment, and cause an incredible amount of waste in many industries and environments. The success of the Toyota Prius shows what direction needs to be taken. I''ll be p_ssed if they use any bailout money to keep manufacturing the same old archaic junk.

[l010674]

I think that in order to keep this economy going they need to give the 700 billion bail-out to the tax payers and pay off all of our debts. After all we''re the one''s that help the rich stay rich. If you bail out GM, the consumers are still not gonna have enough money to go out and buy all the new cars that are being made and they''ll just be sittin'' on the lots at the dealerships collecting dust and dirt. Congress needs to get a clue! January 20th can''t get her fast enough! I don''''t get a bail-out. Why should they? Suffer like the rest of us.

[hitoyou1]

Anyone thay suports an Auto bailout needs to be ran out of office.

[hitoyou1]

So in 10 years what do we do when they come asking for more money? When do we say NO? All the tax payer is doing is givimg money away. They will never get it back from GM, this is not 25 years ago. GM would be going down even if housing was not. It is time to say NO.

[yeswecan09]

These blogs are running 10 to 1 against a bailout for the US automakers and YET, the House and Senate seem determined to do exactly the opposite. Who in the hell do they represent???
*****
I think the government would let the Big 3 die a quick death if not for the fact that GM alone has finanical ties into 2,100 other companies.

If GM dies so do many of those smaller companies who depend on the money from GM.

As much as this pains me to say this -- give the Big 3 the money they need to refit and retool; with the added promise that the companies will learn to adapt to a changing world.