Auto bailout clears House; bigger hurdle ahead
In the Senate, many Republicans resist $14 billion package, worried that the industry won't repay US loans or become more competitive.
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But the key to the plan is the prospect that Washington can use loans to leverage changes across the domestic auto industry, especially a new commitment to innovation and efficiency.Skip to next paragraph
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“Green is gold. Making a commitment to innovation, fuel economy, and better emission standards makes the auto industry in our country more competitive. People will want to buy their cars,” Speaker Pelosi added.
Republican lawmakers opposing the bill insist that $14 billion isn’t enough to leverage those changes.
“This is only a down payment. We had testimony last week by one noted economist [that] it’d be $125 billion. Other people say more,” said Sen. Richard Shelby (R) of Alabama, the top Republican on the Senate Banking, Housing, and Urban Affairs Committee, at a briefing on Wednesday. “Unless Chrysler, Ford, and General Motors become lean and innovative and competitive in the marketplace, this is only delaying their funeral.”
The banking panel released its version of the bill Wednesday, but at time of writing Senate majority leader Harry Reid had not scheduled a vote on the measure.
“This legislation will provide solutions to stabilize our domestic automobile industry so that our economy will not suffer a devastating blow and so that millions of American workers do not find themselves out of a job,” said Sen. Christopher Dodd (D) of Connecticut, who chairs the banking panel.
But the bill faces strong headwinds. Besides many Senate Republicans, most Americans oppose a bailout for US automakers, according to recent polls.
Public opposition was strong, too, to a bailout for Wall Street, when the Senate voted a $700 billion rescue package for the financial services industry on Oct. 1. That law, which passed 74 to 25, was backed by 39 Republicans and 34 Democrats.
But GOP leaders see a difference between bailing out the financial industry then and helping automakers now. The financial system - or credit - is the heart the economy, and without it the whole system breaks down.
“I voted for a financial rescue package that I thought was essential to keep the country functioning,” said Senate Republican leader Mitch McConnell after the caucus meeting on Wednesday. “I was convinced … that it was a once-in-100-years crisis…. That, in my view, is not a precedent for what we’re dealing with this week or may be dealing with in the future.”
GOP lawmakers who support the bill say their colleagues don’t recognize what a blow the bankruptcy of even one of the Detroit automakers would be to the US economy.
“There needs to be a strong hammer and nails to nail down a positive plan for the auto companies to get out of the situation they’re in and get onto the road to profitability,” says Sen. Christopher Bond (R) of Missouri, who co-chairs the Senate Auto Caucus. “We ought to stay here until we get this done.”