Wednesday, November 12, 2008
Last Hope-Automakers bailout-Pelosi, Reid to Seek Automakers Bailout Next Week
It's Next Week Or bust! Will The Automakers get the rescue money they need?
ABC News' Jonathan Karl reports: House Speaker Nancy Pelosi says she'll seek assistance for Detroit automakers during a lame-duck session next week.
The idea is to pass a bill opening up some of the $700 billion bailout money for the automakers.
I am told Pelosi will also likely seek an extension of unemployment benefits but wait until January for a major stimulus package.
"In order to prevent the failure of one or more of the major American automobile manufacturers, which would have a devastating impact on our economy, particularly on the men and women who work in that industry, Congress and the Bush Administration must take immediate action," reads a statement by Pelosi.
"Emergency assistance to the automobile industry would be conditioned on executive compensation restrictions, a prohibition on golden parachutes, rigorous independent oversight, and other taxpayer protections to ensure that any companies that benefit from this assistance – and not the taxpayers – bear the full burden of repaying any costs that are incurred."
And now Senate Majority Leader Harry Reid says he "determined" to pass legislation helping the automobile industry next week during a lame-duck session of Congress.
Reid's statement offers no specifics and reminds us that until January "we still have the slimmest of majorities in the Senate; this will only get done if President Bush and Senate Republicans work with us."
On that point:
The White House is lukewarm to Pelosi's idea of using some of the $700 billion banking bailout money for the automobile industry. One senior White House official told me it's "a slippery slope" and asked rhetorically, "who's next?"
The White House would prefer Congress pass legislation loosening the restriction on the $25 billion in loans Congress made available to Detroit in September. That money, under current law, must be used for fuel efficient technology. So far, not one dollar of it has been loaned. The auto industry says it needs money to stay alive, not to embark on new projects.
"Why does Speaker Pelosi absolutely refuse to use the $25 billion actually appropriated for the automobile industry?" asks the official. Answer: environmental groups don’t want the money to be diverted.
Meanwhile, the auto industry likes Pelosi's approach, but sees it as a stopgap measure until the new Congress passes something more comprehensive in January. As one auto industry source working with Congressional leaders told me, "We're talking about a bridge loan, a bridge to the stimulus."
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