WASHINGTON, Dec. 5, 2008
White House, Dems. Discuss Auto Bailout
Agreement Closer On $15B Package; Bush Insists Loans Come From Green Cars Fund
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Play CBS Video Video Auto Execs Plead For Bailout The CEOs from Detroit's Big Three automakers urged Congress to pass a much-needed rescue package, as the U.S. automotive financial industry faces massive financial turmoil. Sharyl Attkisson reports.
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Video Auto Bailout Pros And Cons Support for the multibillion dollar auto bailout has been thin according to the polls and sentiment in Congress. Chrysler's president and Sen. Richard Shelby discuss their positions on the bailout.
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Video Are Hybrids The Future? Auto executives arrived for hearings on Capitol Hill in hybrid cars, symbolizing what they say is their commitment to developing better technology. But will consumers buy it? Daniel Sieberg reports.
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(AP GraphicsBank)
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In-Depth Q&A: Big Three Bailout? Why Detroit's automakers might get a rescue package
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Fast Facts GM Moves General Motors announces cuts to salaried jobs, production, dividend to raise turnaround cash.
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.
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.Web Exclusive: GM Dealers Feel Pinch
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."
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
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See all 114 CommentsThis 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.
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!!!!
Then you should be happy, because McSame was also.
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
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
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/
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
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)
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)
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!
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.
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)
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