WASHINGTON, Dec. 8, 2008
Dems Send Auto Bailout Plan To White House
Draft Of $15 Billion Measure Expected To Come To A Vote This Week
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Play CBS Video Video Pelosi: Bailout Not Limitless Speaker Nancy Pelosi (D-CA) and House Financial Services Committee Chairman Barney Frank (D-MA)said they are in conversations with the White House on moving the auto industry bailout forward.
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Video Car Czar To Oversee Bailout? Congress is working overtime on a plan that will help the Big Three before the new year. A possible "car czar" may be appointed to ensure that tax dollars are well spent. Sharyl Attkisson reports.
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Video Congress, Big 3 Settle Bailout Congressional Democrats and the Bush Administration are working together in order to finalize a rescue multi-billion dollar taxpayer bailout for Detroit?s auto industry. Kimberly Dozier reports.
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Auto industry workers and supporters demonstrate outside the office of Sen. Diane Feinstein, D-Calif., Dec. 6, 2008, in San Francisco. (AP Photo/Ron Lewis)
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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.
The measure would rush bridge loans to Detroit's struggling Big Three but would also demand that the auto industry restructure itself in order to survive and would put an overseer chosen by President George W. Bush in charge of monitoring that effort, according to a draft obtained by The Associated Press.
The leader of the U.S. House of Representatives, Speaker Nancy Pelosi, says negotiations are continuing with the White House on a $15 billion auto industry bailout that lawmakers are hoping to bring to a vote this week.
Pelosi says the idea is to create a viable auto industry and that will require concessions from management, labor, creditors and others.
The speaker puts it this way: "We call this a barbershop. Everybody's getting a haircut."
The White House had just begun evaluating the Democratic language, according to officials who would comment on the continuing negotiations only on condition of anonymity. But they said the draft didn't appear consistent with the principles behind a broad agreement to give long-term financing only to viable companies. They said it was hard to tell definitively whether their doubts were warranted and they would continue talking to Capitol Hill representatives.
"We've made a lot of progress in recent days to develop legislation to help automakers restructure and achieve long-term viability," said White House Press Secretary Dana Perino. "We're reviewing draft legislation we received this afternoon and are continuing our discussions with Congress.
"Long-term financing must be conditioned on the principle that taxpayers should only assist automakers executing a credible plan for long-term viability. We'll continue to work with members on both sides of the aisle to achieve legislation that protects the good faith investment by taxpayers."
In Congress, Senate Majority Leader Harry Reid, a Democrat, said, "While we take no satisfaction in loaning taxpayer money to these companies, we know it must be done." He added, "This is no blank check or blind hope."
Earlier Monday, the White House and a top Democratic lawmaker said they were likely to strike a deal quickly on the multibillion-dollar bailout, which places strict restrictions on the automakers while they're receiving the loans and mandates that the government overseer keep close tabs on their efforts to restructure.
The emergency loans would be drawn from an existing program meant to help the automakers build fuel-efficient vehicles.
The auto makers would have to submit a detailed restructuring plan to Congress by March 31.
The plans would be evaluated every 45 days by a "car czar" and or a board of advisors appointed by the President, reports CBS correspondent Sharyl Attkisson.
Sen. Christopher Dodd (D-Conn.) heads up the Senate Banking Committee and is a key negotiator.
If congress passes something this week, this is a band-aid measure to get through the short term, this is not the bailout the industry was seeking - the $34 billion dollars plus, Attkisson reports.
"No," Dodd told Attkisson. "There's no appetite for that here with all due respect, these are self-created problems."
But Dodd says if the auto makers' long term plans look good in the spring, it will give Congress the confidence to commit more tax dollars.
As for taxpayer protections, the proposal includes:
"We're going to create, by March 31, we hope, a profitable and viable automobile industry for this country," Dodd says.
If that doesn't sound ambitious, how about this; the first evaluation of the auto makers' plans to restructure is due in three weeks from the car czar and presidential advisors, who haven't even been chosen yet.
The rescue package may be most important for General Motors, which is reportedly in danger of imminent collapse without an emergency loan. During an appearance Monday on CBS' The Early Show, Michigan Gov. Jennifer Granholm said that "if General Motors doesn't get this loan by the end of this month, it is 'game over.'"
The White House said the fundamental approach in the language does not appear to meet Bush's main test: that long-term financing with taxpayer dollars only be made available to companies with a viable future in the marketplace. Bush officials believed congressional negotiators were on board with this idea as well.
The proposal also gives the overseer - a kind of "car czar" - say-so over any major business decisions by the automakers while they're taking advantage of federal aid. The companies would have to open their books to the government, including informing the overseer of any transaction of $25 million or more and any "material change" in their financial condition.
Under the plan, the carmakers' could get emergency loans right away. Then the overseer would write guidelines, due on the first of the year, for restructuring the companies that received them.
In testimony before Congress last week, General Motors Corp. and Chrysler LLC, which have said they are weeks from collapse, made it clear they would need a total of $14 billion to $15 billion to survive through early 2009. Ford Motor Co. has said it has enough money to stay afloat unless one of the other Big Three goes under or the economy deteriorates more sharply.
While the measure would put an administration official selected by Bush in charge of setting terms for restructuring, the decision about whether the terms were being met would not be made until President-elect Barack Obama had been sworn in. Congressional Democrats and the White House were working to find a broadly supported candidate who could span the two administrations.
Congressional officials said Kenneth Feinberg, the lawyer who oversaw the federal Sept. 11 victims' compensation fund, was under consideration for the position.
Asked if a deal could be struck for a vote as early as Monday, White House spokeswoman Perino said, "I think it's very likely." That was before the Democrats sent their draft.
Rep. Barney Frank, a Democrat and the Financial Services Committee chairman, said that he, too, expected a deal by the end of the day and enactment by week's end.
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- this is my comment on the money matters in the big companies that have failed. why would we give money to the same CEO''s that sat and watched their companies fail and let them lay off or fire all the lil workers that are just doin their jobs that are asked of them. i dont hear any of the firings of any CEO''s or big heads of these companies, instead, we see them on tv askin for low interest loans from us all the while, we are still gettin hit with high interest payoffs and such.id like to see the upper level company staff that had major say sos in the decision making of these distasterous companies loose their jobs and then get replaced by new people to start frech with our money they r borrowin. why would we give money to those that have already provcen failed??? i might b repeatin yself a couple times here but im in discust. the thousands of employees that are workin hard everyday doin whats asked of them, are gettin laid off while the employees that are managin and makin those bad decisions that ended up helpin the companies fail are still employed with the same salaries. wouldnt it b better to fire some of the major big heads and keep the hard workin employees that help make the economy grow. i also dont here anything bout the past few years record makin profit monies that these companies had to declare and where these ppl are now and whats with all that money??
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- $25 a hour is about right for all the big 3 I make that driving 18 wheeler.
posted by wprozak
If you are a teamster add to that $25 an hour your health and welfare benefits, I am sure it comes out to about the same. The teamsters have a much better retirement plan then the autoworkers. I''ve heard $3000 a month with social security on top of that from a retired teamster. Autoworkers with social security get about $3000 a month, with 30 years service. I''ve seen their contract book. - Reply to this comment
- I especially like the part where Frank and Pelosi want to make sure that taxpayer funds are not used to pay for the auto executive''s jets. Frank was heard saying "no taxpayer funding of jets". This statement agreed to by Pelosi, hours before she climbs on her own personal taxpayer funded jet.
You just gotta love the power that our politicians feel. - Reply to this comment
- I cant believe anyone would support either party after what they are doing.....The idiots from both sides of the isle do not have a clue,,,all they know how to do is throw money at problems,with not much getting accomplished for the people.let the middle class go under and Washington will have problems..can you say revolution?
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- If congress were paid by the hour it would relate to more than 73 $ an hour,If everyone needs a haircut Pelosi,,,start with yours and everyone else''s in Washington...leaders should lead by example...something those people don''t know how to do.
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- With all the bailouts and financial stuff going on and now the big 3 auto $billions going out the Democrats should send out a bottle of K-Y to every citizen for only $10 to Obama Voters and $15 for everyone else. Oh! illegals get it of free, don''t ya know.
Democrats should know who to screw more as that is the most crooked party in history. - Reply to this comment
- jsd330 .....no one that works on a line is worth 73$ a houe no way ,no matter how the job market is,25 $ a hour is about right for all the big 3 i make that driving 18 wheeler
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- NO BAILOUTS! LET THEM FALL!!!
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- Posted by jsd330 at .....no one work on a line is worth 73$ a houe no way ,no matter how the job market is,25 $ a hour is about right for all the big 3
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- wprozak You must not listen to or read the newspaper very much. The UAW has already told congress at the hearings the job bank is being given up. They are also going to open up the contracts with the big 3. I doubt they will work for $15 as you suggest since the japanese autoworkers make more then that. At the toyota plant in Kentucky the wage is $25 per hour.
I don''t know how GM & Chyrsler run their job banks, but I personally know some people in the Ford job bank and they report to the plant every day M thru F and go to classes or do non traditional work, or they can volunteer at charitable organizations The city, county and state governments employees union''s will not them do volunteer work on any properties or buildings that is under their jurisdiction.
I don''t know what you do for a living or what state you live in, but wages also have to do with the cost of living in an area, and how many jobs are available in that area. When there is competion for jobs as there is now business owners won''t pay a decent wage if they don''t have to. - Reply to this comment
President Obama's 
