With Bailout, Bush Hands Car Keys To Obama

Outgoing President Thwarts Imminent Demise Of Automakers But Industry's Ultimate Fate Lies With New White House

(CBS/AP)  President Bush's $17 billion lifeline to General Motors Corp. and Chrysler LLC means neither company will perish while he occupies the White House, yet leaves the ultimate fate of the once-proud auto industry up to the incoming Obama administration.

Little more than a month from leaving office, Mr. Bush framed his rescue as "a step that we wish were not necessary," but one that saved the country from a disastrous economic blow.

It was also one that looked past public opposition, included a key concession of his own and spared a gridlocked Congress the consequences of its own futility.

For that he drew considerable praise from Democrats, Chrysler and General Motors, the distinctly more tempered appreciation of the United Auto Workers union and the scorn of fellow Republicans all the while preserving complete freedom for his successor to start anew on Jan. 20.

Whatever the terms, targets or requirements of the loans that Mr. Bush's Treasury Department laid out, administration officials said President-elect Barack Obama was free to change them at his will.

Because the loans were ordered by the administration, rather than mandated in legislation, the money flows first and the repayment terms are literally written on paper that the new president can rewrite. He can ease or toughen provisions in future negotiations.

In a likely harbinger, the autoworkers union became first in line to seek changes.

Mr. Bush, no particular friend of organized labor, had wanted the UAW to agree to wage and benefit concessions that would make union workers equal in compensation to employees turning out Japanese cars at factories in the United States.

Sen. Carl Levin, D-Mich., objected, and Treasury Secretary Henry Paulson agreed to a change that said the compensation could be competitive, rather than equal.

Not yet satisfied, the union's Alan Reuther said, "The UAW believes these provisions unfairly single out workers. They were not part of the agreement that the White House entered into with the Congress. We believe they should be removed."

It's the type of detail likely to come up again and again as the new administration tries to assure the survival of the auto industry without antagonizing organized labor, a key Democratic constituency.

"I just want to make sure that when we see a final restructuring package that it's not just workers who are bearing the brunt of that package," Mr. Obama said.

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Congress Reacts To Bailout
Click here for details of the auto bailout
CNET's Brian Cooley: The "Detroit's A Loser" Myth
Click here to read the full text of President Bush's announcement
Click here to see details of General Motor's bailout terms
Click here to see details of Chrysler's bailout terms

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He didn't say so, but some Democrats have already declared General Motors CEO Rick Wagoner must go, for example.

It's unlikely any Republicans will be surprised by such maneuvering. But after 14 years of controlling at least one branch of government, they are soon be spectators.

Mr. Bush's big concession came when he agreed to help the auto industry with funds from the Troubled Asset Recovery Program, the $700 billion bailout that Congress approved last fall to stabilize the financial industry.

He had long said his administration lacked authority to dip into TARP to help the automakers. But that insistence crumbled a week ago when Congress gridlocked over legislation.

But there is a catch, at least as long as Mr. Bush's version of the loan remains in force.

Of the $17.4 billion in the loan package, $13.4 billion is available this month and next. The remainder will be used only if the administration is free to tap the $350 billion that remains in the financial industry bailout fund. And that can only happen if Congress first votes on releasing the funds.

It's a vote Democrats would just as soon not take, given widespread public opposition to bailouts.

In concluding that he had to step in, Mr. Bush also set aside his free-market principles, though on a far smaller scale than when he agreed to bail out big banks last fall.

Only a day earlier, he had spoken favorably of bankruptcy as the preferred way to let companies bear the consequences of their decisions. And yet, he said, "these are not ordinary circumstances."

The fact that he was left with no choice reflected economic reality as well as his political weakness in the final weeks in office.

While Mr. Bush and Democrats agreed rather easily on a rescue bill earlier this month, Senate Republicans wanted no part of it.

Several officials said that despite an invitation to join those talks, Senate Republican Leader Mitch McConnell of Kentucky decided not to send representatives.

That way, when the White House and Democrats reached their compromise, he was free to walk away.

He did, to the embarrassment of the White House, which watched from the sidelines little more than a week ago as Sen. Bob Corker of Tennessee and other Republicans sought unsuccessfully to wring far-reaching concessions from the UAW.

When their bid failed, Senate Republicans killed the legislation that Democrats and the administration had written.

The UAW seemed unperturbed, calculating that Mr. Obama would be a less demanding master.

They may be right.

[stupidrules3]

It looks like GWB wants to be able to say,"The carmakers didn''t fail on my watch." This administration has violated many of the fundamental economic principles that the republican party has always said are inviolable. We will be paying for this fiasco for years and it will only delay the inevitable demise of these dinosaurs.

[xmas6661]

Anyway, I''''ve gotta do some XMAS shopping.

Unlike you Dems I''''m not an atheist

and I still have the means to do some solid spending.

Posted by faletinme at 04:56 PM : Dec 20, 2008


GOOD LUCK WITH THAT CHRISTIAN ACT I''M NOT IMPRESSED THOUGH

A FEW REMINDERS BTW,

Witnessing

[H]e that winneth souls is wise. Proverbs 11:30

Selfishness

they all look to their own way, every one for his gain, from his quarter.
Isaiah 56:11


Selfishness is a malignant cancer. It seems like all our society is based on ourselves. All we think about is ourselves. What about me? What about my feelings, my time, my money? With many of us, all we can think of is ourselves, and what we can get out of life. We''re so busy thinking about ourselves that we fail to notice others. All we think about is ourselves, our little social groups, and ignore and exclude everyone else.

%u201CBut in lowliness of mind let each esteem other better that themselves.%u201D (Phil 2:3). We should meekly and humbly consider everyone else BETTER than ourselves.



Merry Christmas to all

And best regards to everyone that is having a tough time this year

May Christmas bring renewed hope to you for the coming year

[bjcone8559]

Have no fear. In one month the Messiah will be here and we will all get free hybrid cars and heal the planet


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Posted by jedi23231



At least we will start hedading in the direction of healing the nation. It''s going to take a lot of healing after the criminal Bush/Cheney regime.

[faletinme]

About the time our original thirteen states adopted their new constitution in 1787, Alexander Tyler, a Scottish history professor at the University of Edinburgh , had this to say about the fall of the Athenian Republic some 2,000 years earlier:


''A democracy is always temporary in nature; it simply cannot exist as a permanent form of government.''


''A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury.''


''From that moment on, the majority always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.''


''The average age of the world''s greatest civilizations from the beginning of history, has been about 200 years''


''During those 200 years, those nations always progressed through the following sequence:


1. From bondage to spiritual faith;


2. From spiritual faith to great courage;


3. From courage to liberty;


4. From liberty to abundance;


5. From abundance to complacency;


6. From complacency to apathy;


7. From apathy to dependence;


8. From dependence back into bondage''



Democrats are trying to foster the Dependency Stage, after having been elected as a result of the Apathy Stage.

[faletinme]

It''s too bad Jedi. This fool hasn''t the slightest inkling of how sky-high capital gains tax rates, windfall profits taxes, unfounded environmental red tape, failure to check the mortgage lending, pro union legislation (check out H.R. 280 that was thankfully killed by republican senators but will likely pass in the new admin, it aims to force collective bargaining on all municipalities!).

Of course he doesn''t understand why Dems overwhelming support of handing $700 billion over to selected banks might have deleterious effects.
It was uneducated, unthinking voters tat got us into this mess.

Yes, Bush was pretty bad but it doesn''t make sense to unthinkingly turn to something worse!

[faletinme]

It''s too bad Jedi. This fool hasn''t the slightest inkling of how sky-high capital gains tax rates, windfall profits taxes, unfounded environmental red tape, failure to check the mortgage lending, pro union legislation (check out H.R. 280 that was thankfully killed by republican senators but will likely pass in the new admin, it aims to force collective bargaining on all municipalities!).

Of course he doesn''t understand why Dems overwhelming support of handing $700 billion over to selected banks might have deleterious effects.
It was uneducated, unthinking voters tat got us into this mess.

Yes, Bush was pretty bad but it doesn''t make sense to unthinkingly turn to something worse!

[faletinme]

This is true DebinOK. Dem revel when the average American is distressed and abhor the times when the average American is doing well.

When they can engineer bad times as they''ve done in the past 2 yrs people tend to believe their populist savior ***, as they did with Jiminy Carter. But of course as things get bleaker under the democrat cloud people wise up. The market perfomance statistics I post early tell the story. Dems only have a use for poor people, once they are successful the dems want nothing to do with them. It is the party that fosters and prays on misery.

Anyone with half a brain predicted this when NAncy Pelosi stood on the Capitol steps with her sh* t eaten grin in Jan 2007. Of course, they were right. This experiment with a democrat congress has been 4 trillion dollar disaster.

[debinok1]

Hey, look around the corner, thats the next depression breathing down our necks, start saving cash at home, start stocking up on non perishables, purchase a generator if possible. This is gonna hit hard.

[faletinme]

It''s interesting that IAm Hungry "couldn''t find any reference to this article. It took me about a minute.

Also funny that Hungry would interpret my having done some shopping as some kind of admission. That''s an old liberal tactic.

[faletinme]

Her''s a piece form the NY Times:
http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63

It lays it out pretty well.

The 2003 article quote Barney Frank as saying:''''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'''' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''''

So you lied...it''s a 2003 quote.

[faletinme]

sry that didnt parse well but each years data starts with the year. The format is YR , Congressional Session, Dow Return in %,Senate Control Party, House control Party.

Compounded at the 13.1% republican only return $1 in 1986 would have generated $14 today. a huge winner after inflation.

When the same dollar is compounded at the Democrat involved rate or 3.7% that $1 would have generated $2.25 today. A loser after inflation. That is the destructiveness of these people on our economy.

[faletinme]

These are the returns to the DJIA for each year for the 100th 100th congresses. In years where the Dems control one or more houses of congress the average return is 3%. In years when Republcans control both houses of congress the average return is 13%. Over 20 years that adds up to serious cash.

yr congress senate house
1987 100 2% R D
1988 100 12% R D
1989 101 27% D D
1990 101 -4% D D
1991 102 20% D D
1992 102 4% D D
1993 103 14% D D
1994 103 2% D D
1995 104 33% R R
1996 104 26% R R
1997 105 23% R R
1998 105 16% R R
1999 106 25% R R
2000 106 -6% R R
2001 107 -7% D R
2002 107 -17% R R
2003 108 25% R R
2004 108 3% R R
2005 109 -1% R R
2006 109 16% R R
2007 110 6% D D
2008 110 -35% D D
avg with Dems 3.7%
avg with Reps 13.1%

[platteman]

Bush should have waited until 20 January 09 with the auto bailout. Let Obama do it all. We will see just how good he really is. Problem now is that the taxpayer will be paying 95% of all auto workers pay for the rest of their life because Obama is a big union guy. He won''t let them suffer. All hail comrade Obama!!

Pretty soon we will be paying for everyone to get a bailout. Thanks to the do nothing congress for 2 years, we will work more than ever, have the most ethical congress ever, right. ROLOFLMAF

[irmcvet971]

That''''s a few trillion, right there.

Posted by faletinme at 05:47 PM : Dec 20, 2008


You seem to want to go back to the ECONOMIC POLICIES that brought all this about? Don''t forget that the ECONONY was in the tank BEFORE the Meltdown. You can try all you want to spin this but EVERYONE knows who''s responsible... Helll that slime dog Gramn? He let a Lobbyist from the Banking Industry write the law that took away ALL the regulations!

[irmcvet971]

OBAMA IS AN UNCLE TOM!!

Posted by Hackerpc at 05:59 PM : Dec 20, 2008

Your intelligence is simply overwhelming!! ROFLMAO Did you actually get through the 6th grade? ROFLMAO

[faletinme]

Heck thats easy. Dems killed Bush''s Mortae Lending Oversight Bill in 2003.

Here''s a quote from Barney Frank at the time: "These two entities%u2014Fannie Mae and Freddie Mac%u2014are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

That''s a few trillion, right there.

[McHineguy]

With Bailout, Bush Hands Car Keys To Obama

%u201CHere you are Barack, I can%u2019t start the *** car!%u201D



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Posted by JesusEyes at 05:35 PM : Dec 20, 2008

I think its more like: "Here you go Barack, you have promises to keep and I dont want to get in your way. But I did give it a hold over spin so you dont have to act until March. thats better than what I got from them."

[McHineguy]

The bridge in question was a non-redundant design. Meaning if one part fails, the whole thing fails. It was scheduled to be replaced with a redundant design as soon as funding was available.


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Posted by earache4 at 05:23 PM : Dec 20, 2008

OK, so we both agree, the government should build roads. I think thats where I came in. I dont think goverment should do many of the things it does and if it stopped those things it might have money to build bridges. I also dont think its something you can lay at the feet of Bush. I, too, have many criticisms for him. But I dont recall that he ever vetoed a single new road construction. In fact, he signed legislation that would have built Alskas so called bridge to no-where, the year before the Minnesota bridge collapse.

But I have to go now. Dinner calls.

BTW, I think faletinme has left too. If I had time I would cite some legislation for him but Im pretty sure there are no clean skirts on the meltdown dance floor. Maybe next time. Nice talking with you. Good night.

[McHineguy]

%u2026And was scheduled for replacement as soon as federal funds were available. Now list the funding legislation passed by Bush to fix deteriorating roads and bridges.....


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Posted by earache4 at 05:14 PM : Dec 20, 2008

I dont think Bush passes legislation. Did he veto a bill that would have repaired those bridges? BTW, those undersized steel plates werent even known about until AFTER the colapse and the bridge had been examined just the year before and found to be ok. Lets make this agreement, Roads are a good thing for goverment to do, the bridge probably isnt a good example for either argument.

[McHineguy]

China is now the global leader. Sorry....


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Posted by earache4 at 05:03 PM : Dec 20, 2008

You are partly right, their economy is the largest in absolute terms but not on a per-capita bsis. But for our discussion, its not subject to capital investment by foreigners and is seen from the outside as a more risky investment than ours. So most investors are not goign there without other incentives (like a promise to purchase goods).