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The Bailout Police

WASHINGTON — The House passed a $15 billion auto bailout bill Wednesday, but a key supporter saw trouble ahead in the Senate.

“I don’t think the votes are there,” said Sen. George Voinovich, R-Ohio, a backer of the measure. Earlier in the day, several GOP critics lambasted the bill as not going far enough in requiring changes, even though the White House supports it.

“This is only delaying their funeral,” Sen. Richard Shelby, R-Ala., said of the carmakers.

The bill passed the House by a vote of 237-170. Senate Majority Leader Harry Reid of Nevada said the Senate would debate the legislation through the weekend if necessary.

President-elect Barack Obama backs emergency bridge loans for Detroit’s automakers in exchange for a restructuring of their businesses. So does President Bush, who sent Vice President Cheney and White House chief of staff Joshua Bolten to lobby Senate Republicans at their weekly lunch.

Afterward, Sen. Bob Corker, R-Tenn., told reporters, “They probably left with less support” than they came in with. “There’s less than a handful of votes in there.”

The bill would create a government “car czar” named by Bush to oversee assistance for American automakers. That official would have the power to force the companies into bankruptcy in spring if they don’t make the necessary deals with labor unions, creditors and others to become viable.

The bill would limit executive pay, ban so-called golden parachute severance packages for departing executives and force the automakers to sell their corporate jets. It would give General Motors (GM) and Chrysler up to $15 billion in loans. It sets terms for Ford Motor (F), which has said it will not take a loan but will ask for a $9 billion credit line.

“It’s a bill that will provide bridge financing to one of two possibilities,” Joel Kaplan, Bush’s deputy chief of staff, told reporters Wednesday. “Fundamental restructuring or bankruptcy.”

House Majority Leader Steny Hoyer, D-Md., said that while “there is a great deal of reluctance” to bail out automakers, letting them fail would be catastrophic for the economy.

“Without this bridge, we’re going to fall into the greatest calamity since the Great Depression,” Rep. John Dingell, D-Mich., said on the House floor.

Meanwhile, Sen. Max Baucus, D-Mont., finance committee chair, objected to a provision designed to help transit agencies. He said in a statement that the provision, involving certain leases, “really just helps the banks that entered into these sham transactions in their attempts to avoid taxes.”

Republicans were preparing a strong fight against the aid plan in the Senate, not only taking on the Democrats but standing in open revolt against their party’s lame-duck president on the measure.

The Republicans want to force the companies into bankruptcy or mandate hefty concessions from autoworkers and creditors as a condition of any federal aid. They also oppose an environmental mandate that House Democrats insisted on including in the measure.

House Speaker Nancy Pelosi said it represented “tough love” for U.S. auto companies, and “giving a chance — this one more chance — to this great industry.”

The White House, struggling to sell the package to congressional Republicans, said earlier that a carmaker bankruptcy could be fatal to the auto industry and have a devastating impact on workers, families and the economy.

“We believe the legislation developed in recent days is an effective and responsible approach to deal with troubled automakers and ensure the necessary restructuring occurs,” said Dana Perino, the White House press secretary.

1 Comment»

[…] Bailout Police « Vandamonium’s Weblog Posted in December 10th, 2008 by in Uncategorized The Bailout Police « Vandamonium’s Weblog So does President Bush, who sent Vice President Cheney and White House chief of staff Joshua Bolten […]

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