White House, Dems. Discuss Auto Bailout

Agreement Closer On $15B Package; Bush Insists Loans Come From Green Cars Fund

(CBS/AP)  Jolted by the loss of thousands of jobs, congressional Democrats and the White House reached for agreement Friday on about $15 billion in bailout loans for the beleaguered auto industry. President George W. Bush warned that at least one of the Big Three carmakers might not survive the current economic crisis.

Several officials in both parties said the breakthrough on a long-stalled bailout came after House Speaker Nancy Pelosi bowed to Bush's demand that the aid come from a fund set aside for the production of environmentally friendlier cars. The California Democrat spoke to White House chief of staff Josh Bolten during the day to signal her change in position, they added.

Congressional budget analysts have said tapping the fuel-efficiency program for a broader auto bailout would net only $7.5 billion in short-term cash but amended that to say adjustments were possible that could double that amount. Pelosi and environmentalists had opposed making use of those funds. Instead, they wanted the administration to take money from a $700 billion financial industry bailout that cleared Congress last fall.

Pelosi's office issued a statement saying legislation would come to a vote in the House next week. The Senate is also scheduled to be in session to consider steps to aid Detroit's Big Three.

"Congress will insist that any legislation include rigorous and ongoing oversight to guarantee that taxpayers are protected and that resources are directed to ensure the long-term viability and competitiveness of the American automobile industry," Pelosi's statement said.

Officials in both parties also said the legislation would include creation of a trustee or group of industry overseers to make sure the bailout funds were used by General Motors Corp., Ford Motor Co. and Chrysler LLC for their intended purpose. The funds are designed to last until March, giving the incoming Obama administration and the new Congress time to consider the issue anew.

The developments came as desperate auto executives pleaded for a second day with lawmakers for loans to help them survive, and the government reported the worst single month's job loss in 34 years.

Employers slashed 533,000 jobs in November, shooting the unemployment rate to 6.7 percent, the Labor Department reported Friday.

Separately, GM announced it will cut shifts at factories in Lordstown, Ohio, Orion Township, Mich., and Oshawa, Ontario, in February as a result of slumping auto sales. About 2,000 jobs were involved, bringing the year's total to 11,000.

At the White House, Bush declared the economy was in a recession, and he urged a gridlocked Congress to act quickly on a multibillion-dollar industry bailout - with taxpayer protections.

"We are going to have to have some give here," replied Massachusetts Rep. Barney Frank, a senior House Democrat, expressing optimism that compromise might be possible. It wasn't clear whether he was prodding Bush or Pelosi with his comments, but Republicans said there had been no lessening in Bush's refusal to tap the $700 billion financial industry bailout fund to help the automakers.

There were also fresh calls during the day for the Federal Reserve to come to the rescue of the Big Three, possibly in the form of low-cost loans. And Frank said he had talked with Tim Geithner, President-elect Barack Obama's choice for treasury secretary, a possible sign of involvement by the incoming administration.

"I am concerned about the viability of the automobile companies," a somber Bush said.

The president added, "I'm concerned about those who work for the automobile companies and their families. And likewise, I am concerned about taxpayer money being provided to those companies that may not survive." Bush did not elaborate, but executives at both GM and Chrysler have warned that their storied corporations could collapse by year's end.

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The chief executives of GM, Ford and Chrysler, testified for a second day before Congress in support of their plea for a $34 billion bailout in the form of loans. "We believe this is the least costly alternative," Chrysler chief executive Bob Nardelli said.

For the day, at least, their appeals were overtaken by the severity of the job loss figures.

Frank said repeatedly that the unemployment statistics had quieted talk of allowing one or more of the automakers to go bankrupt.

"I think it's fair to say that the jobs report today, this disastrous jobs report, has heightened the interest in doing something." With trademark wit, he added, "If we are lucky we will come out with a bill here that nobody likes, because any bill that any individual liked couldn't pass."

Chrysler President Jim Press suggested the market for the Big Three's cars could evaporate quickly without emergency aid.

"All this talk of bankruptcy has caused our customers and our suppliers to have a lack of confidence, we've got to restore that confidence," Press said on CBS' The Early Show. "By the first quarter, we could run into difficulty paying our bills."

And President-elect Barack Obama wasn't stepping forward with an alternative. Frank, who has been dealing with both the financial bailout and the auto rescue proposal as chairman of the House Financial Services Committee, said Obama is "going to have to be more assertive than he's been."

Bush renewed his call for Congress to rewrite an existing $25 billion program intended to help the industry make more fuel-efficient vehicles. But the president did not explicitly foreclose other options, and Republican aides said the White House might be open to some sort of compromise.

Absent an agreement, the Senate appeared likely to convene next week for a series of votes on various alternatives, all of which would be doomed to failure. Any measure would require a 60-vote majority, an impossibility barring an agreement that involves both parties.

Nardelli, GM chief executive Rick Wagoner and Ford CEO Alan Mulally all drove to Washington this week with detailed plans describing how their companies would use loans to make their industry more competitive in the long run, material that congressional leaders had demanded as a condition for considering a bailout bill.

Repentant after a botched first crack at bailout pleas, the companies' executives said they were willing to overhaul their companies and own up to past errors.

"We made mistakes, which we're learning from," GM chief Rick Wagoner said. Ford CEO Alan Mulally also acknowledged big missteps, saying his company's approach once was "If you build it, they will come."

United Auto Workers union President Ron Gettelfinger, aligned with the industry in pressing for the aid, told senators that any kind of bankruptcy, even a prepackaged one, was not "a viable option." Gettelfinger said consumers would not buy autos from bankrupt companies, no matter the terms of the arrangement.

He also warned that without action by Congress: "I believe we could lose General Motors by the end of this month."

It wasn't enough for some skeptics.

"I don't know how they're going to make it," Sen. Richard C. Shelby, R-Ala., said of the auto makers.

Shelby said Chapter 11 bankruptcy was their way to stay in business. Asked Friday morning on CBS whether there was anything the auto executives could say to change his mind about government aid, Shelby said: "Absolutely not."

[jackp32]

Would someone please tell me how bailing out the big 3 is going to get consumers to buy their products? Without consumers purchasing new cars the bailout will be a dismal failure. I for one will never buy a car produced by any of the big 3 because their cars become junk after 2-3 yrs.

[smurfcrusher]

No surprise Bush wants to loot the green cars fund to bail out the automakers. He''s the most short-sighted and inept decision maker I''ve ever known.

This should not be allowed. If the Big 3 declare Chapter 11, they will not disappear (of course!)

Instead, they will be able to reorganize and get out from the crippling contracts which are making success impossible. Just like Delta and countless other large corporations have done.

Then, and only then, should funds be set aside to help the Big Three along a brighter path - more fuel efficient, reliable vehicles that the rest of the world is offering.

The Big 3 have paid a heavy price for their arrogance, product configuration by lobbyist, and other poor decisions. The American taxpayer should not suffer these fools.

[funkewb1]

How about a provision in this bailout that all the money given to them is to be exclusivly used for plants here in the USA. Why is it I see all this money, that you and I the tax payer will have to repay, going to plants overseas. You want to make a statement people, the next time you go out and buy a car demand it to have actually been made in the USA. Let the rest of the "American" Automotive industry vehicles sit on the lot. Trust me there are plaenty to choose from now anyway.

[ramos937]

There are several factors that have not been examined. First, Ford has stated that it is profitable. It just wants the funds for contingencies purposes. It should not be included. Second, Cerberus Capital, a multi-billion holding firm owns Chrysler. If it will not rescue its own sudsidiary, why show we? History has proven Gettelfinger 100% wrong. Everybody remembers that in the late 70s, Chrysler declared Chapter 11, cut costs drastically and that the government guaranteed its loans. Chrysler emerged much stronger, leaner and a much more viable company. It also sold a lot of cars during Chapter 11 and afterwards.

[Michael Arnold]

Give 100 billion dollars. We still won''t buy their cars.

[callistemon-2009]

***, i love this country.

[whitemale08]

Let''s be honest, the 700 billion bailout package was to really to buy 6 months of GDP.

Through ''fractional reserve lending'', the Federal Reserve can either turn tax-money or treasury bonds into ''reserves'' to be loaned out at 10 times the reserve amount.

That means when you multiply 10 x 700 billion and then add the reserve itself you get the 7.5 trillion that the real cost of the bailout is.

WE ARE RUNNING OUR ECONOMY EXCLUSIVLEY OFF A PRINTING PRESS!!!!

WE HAVE LITERALY ANOTHER POSSIBLE MONTH BEFORE EVERYTHING WILL COMPLETELY BLOW OUT!!!!

[brianbwb-2009]

"Obamas name means the more of the same." Posted by LOOK--------

Then you should be happy, because McSame was also.

[tincup356]

to sockpuppet 4, bingo you are absolutely correct.

[itdfactsu]

Published on Sunday, October 29, 2006 by CommonDreams.org
Bush''s Economic Policies: Don''t Look Behind the Curtain
By Robert Freeman



When Bush took office, the national debt, accumulated since the founding of the nation, stood at $5.6 trillion. Today it approaches $9 trillion. By the time Bush leaves office, it will exceed $11 trillion. In only eight years, he will have created more debt than all other U.S. presidents combined.

Any thug who extorts a $3 trillion loan from the next generation and spends it today can fake the illusion of prosperity, pretending to be a "wizard," at least for a while. But what happens when the bills come due?

http://www.commondreams.org/views06/1029-26.htm

[itdfactsu]

Published on Sunday, October 29, 2006 by CommonDreams.org
Bush''s Economic Policies: Don''t Look Behind the Curtain
By Robert Freeman

One of the most famous scenes in all of movie history is when Dorothy and her three companions stand before the Wizard of Oz. As the travelers beg for help, the gaseous phantasm explodes, "Silence! I know what you want. I am Oz!" The four innocents are cowed into submission.

It is Toto who saves the day, scampering across the floor and pulling back the curtain. The "wizard" lamely tries to salvage his scam, bellowing, "Pay no attention to that man behind the curtain!" They do, of course, and the fraud is exposed for what it is.

President Bush is playing "wizard" with the nation''s economy. He says he hopes the November election will be about the economy but it is bluster, the economic equivalent of "Mission Accomplished." What he really doesn''t want is for anybody to look behind the curtain. For, when they do, they find enormous problems lurking.

In five areas in particular - budget deficits, trade deficits, unfunded liabilities, oil, and China - the president''s policies have damaged the economy, in some cases grievously

Published on Sunday, October 29, 2006

[itdfactsu]

He cannot tell a lie
When Democrats charged that President Bush was unfit for his job, Bush''s defenders dismissed it. But now Paul O''Neill, a classic GOP insider, says the same thing -- and it''s even worse than you''ve heard.

By Sidney Blumenthal


Former Secretary of the Treasury Paul O''Neill, fired and forgotten, mild-mannered and gray, appears an unlikely dissident speaking truth to power. He was, after all, the CEO of Alcoa, a pillar of the Republican establishment.

More is involved with him than pride and pique.


O''Neill sounds an alarm against an unfit president who lacks "credibility with his most senior officials," behind whom looms a dark "puppeteer," as O''Neill calls Cheney, and a closed cabal. "A strict code of personal fealty to Bush -- animated by the embrace of a few unquestioned ideologues -- seemed to be in collision with a faith in the broader ideals of honest inquiry."

He is upset at the regular violations he sees against his notion of "sound" government. There is, he concludes, "a pattern: either no process, or a truncated one, where efforts to collect evidence and construct smart policy are, with little warning, co-opted by the White House political team, or the Vice President, or whoever got to the President and said something, true or not."

READ THE WHOLE STORY

http://dir.salon.com/story/opinion/blumenthal/2004/01/15/o_neill/

[jowand]

Let them file for Chapter 11 bankruptcy protection, they will have to do what the bankruptcy court tells them to do to be profitable again. They will have to do it, without all of the politics, or go out of business completely.

[tincup356]

you people just haven''t figured out ...your not going to elect an honest president out of a pool of dishonest politicians, from either side of the isle ,They belong to the same group of greedy white collar , suit and tie terrorists .the clever disguise is that they say they are two different parties but they both seem to be working hand in hand to go to illegal wars, take rights away in the name of terror,selling out America with this URGENT, MUST PASS NOW, bailout.Funny how its 6 weeks later and the only ones urgently helped were those who made the bad loans in the first place.This whole mess is beginning to have an extremely foul odor to it, the odor of TREASON.

[itdfactsu]

Gee, I dont remember the "Americans" coming together to help the south

back in the 1980''''s


when the price of oil plunged and caused oil related and non-oil businesses to fail, and hundreds of thousands of jobs to be lost.

People in the south were loosing their houses and throwing themselves out of office windows back then. Where were the patriotic "Americans" then?



Posted by edintex at 10:17 PM : Dec 05, 2008


Awh the Reagan years and now the Bush years

Both Republican Presidents no wonder you didn''t get any help

[edintex]

As a gesture of his gratitude for unwavering support from the auto industry and the unions over the past 8 years AND the last election, PRESIDENT Bush should withold any money from the automakers. Let whatever happens happen.

The Dems in Congress should be left on their own to figure out what to do between now and January when their new God is sworn in. Afterall, they got the union support and now have to "pay up" the favor.

I have owned a new Dodge and Chevy over the past few years. I have had nothing but terrible heartache from owning these vehicles. The corporations did NOT stand behind their products. They stuck it to me instead. They all laughed at me while I had a wrecker tow my 1 YEAR OLD DODGE away from their dealership to have the engine replaced at MY expense somewhere else. I intend to literally celebrate in front of a Dodge dealership if the day comes where they declare bankruptcy. They are all worthless overpaid bums! They all deserve what they get. (Both the Auto Unions AND Congress)

[edintex]

As a gesture of his gratitude for their unwavering support from the industry and the unions over the past 8 years AND the last election, PRESIDENT Bush should withold any money from the automakers. Let whatever happens happen.

The Dems in Congress should be left on their own to figure out what to do between now and January when their new God is sworn in.
I have owned a new Dodge and Chevy over the past few years. I have had nothing but terrible heartache from owning these vehicles. The corporations did NOT stand behind their products. They stuck it to me instead. They all laughed at me while I had a wrecker tow my 1 YEAR OLD DODGE away from their dealership to have the engine replaced at MY expense somewhere else. I intend to literally celebrate in front of a Dodge dealership if the day comes where they declare bankruptcy. They are all worthless overpaid bums! They all deserve what they get. (Both the Auto Unions AND Congress)

[edintex]

Do you really think that the dems or the people who voted for him worship him?
Posted by DJ_IL at 10:05 PM : Dec 05, 2008

Yes. Some of your buddies are STILL holding signs up on freeway overpasses in Houston PRAISING their god and calling for all sorts of acts of contrition from PRESIDENT Bush. Their signs say "Honk for this" or "Honk for that". I am happy to say that not much "Honking" is going on down here!

[edintex]

What this country needs is some leadership that has no party label on it except "American".
Posted by tennartex at 10:01 PM : Dec 05, 2008

Gee, I dont remember the "Americans" coming together to help the south back in the 1980''s when the price of oil plunged and caused oil related and non-oil businesses to fail, and hundreds of thousands of jobs to be lost. People in the south were loosing their houses and throwing themselves out of office windows back then. Where were the patriotic "Americans" then?

I remember the auto makers and the auto unions speaking AGAINST regulating the price of oil. They wanted to keep the price of gasoline down, which would keep auto purchases up.

Well, you all will now REAP what you sowed. We know what you are or about to go through soon. We really feel for y''all from down here.

[edintex]

As a gesture of his gratitude for their unwavering support from the industry and the unions over the past 8 years AND the last election, PRESIDENT Bush should withold any money from the automakers. Let whatever happens happen.

The Dems in Congress should be left on their own to figure out what to do between now and January when their new God is sworn in.
I have owned a new Dodge and Chevy over the past few years. I have had nothing but terrible heartache from owning these vehicles. The corporations did NOT stand behind their products. They stuck it to me instead. They all laughed at me while I had a wrecker tow my 1 YEAR OLD DODGE away from their dealership to have the engine replaced at MY expense somewhere else. I intend to literally celebrate in front of a Dodge dealership if the day comes where they declare bankruptcy. They are all worthless overpaid bums! They all deserve what they get. (Both the Auto Unions AND Congress)