Auto bailout compromise reached?
posted at 1:30 pm on November 20, 2008 by Ed Morrissey
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Perhaps not so much of a bailout compromise but a retreat by Democrats. Instead of coughing up an additional $25 billion in loans, the bipartisan group of Senators will propose that the $25 billion in energy restructuring loans get used instead for bridge loans to get the Big Three past their current cash crisis:
Republicans and Democrats plan to present the proposal at a mid-afternoon news conference Thursday. But it was not immediately clear whether the compromise plan could draw enough support to get through a reluctant Senate.
It temporarily would divert to troubled automakers money from a program that currently finances the development of fuel-efficient vehicles. The aim would be to cover their immediate expenses.
Democrats had insisted that the restructuring loans had to stay in place so that Detroit could start producing more energy-efficient vehicles. Republicans had refused to give more money than the already-exorbitant funds authorized just two months ago that had not yet been spent. Apparently, Republicans got the better of this argument, although it will probably eventually turn into a separate bailout with commitments to replenish the energy-restructuring fund when Barack Obama takes office.
Rep. Thad McCotter explained his support for government intervention on Fox Business News shortly afterward:
Color me unconvinced. The cure for government distortion doesn’t appear to be the hair of the dog, especially not with the current or future crew in charge. We tried that with the collapse of mortgage-backed securities from the Fannie/Freddie meltdown, and Hank Paulson now won’t even address the toxic assets in his new plans.
I don’t disagree that government distortion made life unnecessarily difficult for the Big Three, but CAFE standards alone didn’t cause their competitive disadvantage. Toyota and Honda don’t outsell the Big Three with less-efficient vehicles. McCotter’s argument sounds like a great reason to stop further government intervention, not to create even more of it.
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McCotter has disappointed me. Pence for minority leader!
lodge on November 20, 2008 at 1:32 PM
I say we demand our 700 billion back and get it out of the hands of these morons. I am really tired of “taking it up the tail pipe”. Pun intended!
milwife88 on November 20, 2008 at 1:35 PM
Uggggh. We were just abotu to have our economy finally washed out of all the bad deals, bad companies, and bad debt.
Now here we are just extending the recession by giving these three horrible companies more money to play with.
Vincenzo on November 20, 2008 at 1:35 PM
Why are Liberals/Democrats/Socialists so GD stupid to think that just b/c they mandate Detroit start producing “green” cars that anyone will want to buy them?
DerKrieger on November 20, 2008 at 1:35 PM
And you wonder why this roller coaster leads to socialism. Politicians just can’t say “no”
lorien1973 on November 20, 2008 at 1:38 PM
BOHICA
Socratease on November 20, 2008 at 1:39 PM
Oy. About the only good thing is that there isn’t going to be another $25 billion on the national credit card. Looks like our new, additional debt will only be around $1.975 trillion instead of $2 trillion (use your own figures, it’s all imaginary anyway).
rbj on November 20, 2008 at 1:40 PM
Exactly!
They’re so ****ing clueless. The MARKET will decide what cars to buy and the companies that meet what the MARKET wants will prosper and those that don’t will fail.
Incidentally, 2009 is gonna be the worst car market ever so it doesn’t matter if they produce a flying car, no-one will buy it. Which means that only companies with huge cash reserves and small, efficient operations will survive (hint: not GM)
lodge on November 20, 2008 at 1:40 PM
Can someone tell me where all the buyers are going to come from? I mean between foreclosures and unemployment, all the credit mess? Are there any lenders out there that will continue to do 125% of sticker price????
gringo69 on November 20, 2008 at 1:41 PM
Don’t worry, we have a printing press.
lodge on November 20, 2008 at 1:41 PM
Because they live in the fantasy-land of Washington, where they believe putting words on paper will change reality. That’s why I hate Senators running for President, even McCain.
Socratease on November 20, 2008 at 1:42 PM
Car buyers?
gringo69 on November 20, 2008 at 1:42 PM
The UAW has got to be pretty steamed. What’s the good of buying Democrats if they don’t come through in situations like this?
Restructuring loans still means that the auto manufacturers need to cut their labor costs and that means the UAW is going have to agree to job cuts.
highhopes on November 20, 2008 at 1:42 PM
Who is gonna be left to buy these vehicles?
gringo69 on November 20, 2008 at 1:44 PM
Senate deal in the works, too…
Wethal on November 20, 2008 at 1:44 PM
Someone needs to slap these Republicans around a bit.
Make the Dems OWN this… and then point out the quid pro quo from the Unions…
Not gonna win if you are not willing to even fight.
Romeo13 on November 20, 2008 at 1:44 PM
Mark my words. This is typical liberal accounting. Obama is going to claim that he “saved” the US taxpayer $25B before he even took office. It will be repeated over and over again as if it were actually true.
highhopes on November 20, 2008 at 1:45 PM
How long before the true effects of that take place? One or two years?
a capella on November 20, 2008 at 1:46 PM
Now go and produce more small and green crappy cars that will sit on your lots and never sell. Then come back for more money later.
LatinRed on November 20, 2008 at 1:46 PM
Unreal. Why would a single repub give these POS companies a bridge loan for a BO administration to give them 50 billion dollars? Dump this bill and hopefully the Big 3 will be in bankruptcy court before the end of the year. Idiot repub’s rise to the occasion to be libtard tools….when will it ever end?
David in ATL on November 20, 2008 at 1:48 PM
I wonder how McCain will vote on this one,……well, no, I don’t.
a capella on November 20, 2008 at 1:48 PM
Let me see now!
We let them use the 25 we already alocated for fuel emmisions. This holds them over till the Dem’s take over. Then they will give the unions another 25 to 50 Billion and also add about 100 Bil to Acorn.
Am I right or just plain wrong??????
We live in a free country? LOL
The govt wants to tell us what we can drive.
How cool or hot we can keep our homes.
Where we have to go to see a doctor.
What we can hear over the radio.
Who has to pay rent or their mortage and who doesn’t.
Indroctunat our children in schools with liberal falsehoods.
The Supreme Court can rewrite the Constitution at will.
We all have to pay for other persons abortions.
We let the Employee tell the Employer how he has to run his company. IE unions.
We all have to pay for a bail out of Banks Car Mfg’s and a hell of alot more.
You call this a free country ????????????????
500 perverts and criminals of Congress tell us how we have to live.
Rick007 on November 20, 2008 at 1:48 PM
Break the UAW’s back instead of ours, let Barney Frank choke on something new!
dmann on November 20, 2008 at 1:48 PM
Another bridge to nowhere. Great!
drjohn on November 20, 2008 at 1:49 PM
Maybe, but it’s going to be absolute hell. If you think bankruptcies and unemployment are bad, wait til you see out of control inflation.
lodge on November 20, 2008 at 1:49 PM
Dear Americans,
Fuck you!
Respectfully yours,
Congress
The Race Card on November 20, 2008 at 1:50 PM
If the Japanese or Europeans gave their auto industries a bailout, the UAW would be screaming bloody murder.
What a colossal waste of money. If the federal government wants a well run auto industry, it should just buy the stock and throw the bums out. GM is $1.8 billion, Ford is $3.5B.
pedestrian on November 20, 2008 at 1:50 PM
Exactly – the GOP needs fighters NOT aisle crossers. The Dems keep screwing things up and manage to pull enough RINO’s over to their side that they succeed in claiming bipartisanship for catastrophic failure.
DerKrieger on November 20, 2008 at 1:51 PM
How about this for an idea? It’s a 65 mpg Ford that is CUTE and CHEAP (24k) that Ford won’t sell here because diesel costs .40 to $1 more per gallon here because of taxes.
If Congress REALLY wanted to help the American people AND the auto industry (and truckers, who move something like what 75% of good around), DUMP the diesel taxes aimed at truckers and THEN Ford would sell this car here.
JustTruth101 on November 20, 2008 at 1:53 PM
Anyone feel like they don’t know that “government bailout” means “OUR F*CKING TAX MONEY THAT WE EARN WITH OUR BLOOD SWEAT AND BRAINS”??????? God Damn them all to hell.
marklmail on November 20, 2008 at 1:54 PM
Question: what do you call a loan that will never be paid back?
lodge on November 20, 2008 at 1:55 PM
Great post. You make a lot of sense.
cjs1943 on November 20, 2008 at 1:57 PM
to paraphrase forest gump….sometimes there just aint enough balls. you know the kind it takes to just say NO to all the handouts. dear God make me a bird…
samiam on November 20, 2008 at 1:58 PM
Two word solution: TAX REVOLT
dmann on November 20, 2008 at 1:58 PM
The reason I don’t “VOTE”
I am not going to donate my hard earned money to some Rich person that has never held a decent job to get another one.
I will never “VOTE” again.
Why should I waste my time voting for some pervert,criminal. or ASSHOLE to get a cush job when all he told me for months leading up to the election was a pack of lies???????
The all swear to uphold the Constitution and the Laws that are on the books. BS They only enforce laws against the one that are trying to follow the law. The lawless laugh at us and continue breaking the law.
I saw Bush twice hold up his right hand and swear on the Bible to uphold the laws only to see him disregard the ones that he deemed to controversial. IE Illegal aliens.
So what I say when voting means absolutly nothing!!!!!!!!!
Rick007 on November 20, 2008 at 2:01 PM
Tim Zank on November 20, 2008 at 2:01 PM
LOL… No $hit.
We used this acronym on a daily basis in the Army. (Five years of Clintoon will do that to a soldier) Thanks for reminding me, I haven’t seen it in years.
Claypigeon on November 20, 2008 at 2:03 PM
McCotter, this isn’t time for Politics. Color me Unconvinced.
Dr Evil on November 20, 2008 at 2:04 PM
I don’t want a puny rolling casket of a vehicle of any kind. You can’t go hunting in a Focus or a Prius. I want my jacked up Z71 crewcab. The idea of the government telling me what to do at every turn makes me sick.
gringo69 on November 20, 2008 at 2:06 PM
I don’t see it as government intervention when the government assumes some of the costs of its idiotic and crushing mandates. Of course it wasn’t CAFE standards alone that did it, but Toyota and Honda don’t start of at a $1500 per vehicle disadvantage so it’s not really a fair comparison when it comes to “efficiency”.
The government has also screwed things up by not letting us drill and refine oil, resulting in gas prices which went through the roof. Add that to the government created housing fiasco, and there are aspects to the Big 3’s demise which are not their fault.
Buy Danish on November 20, 2008 at 2:06 PM
Well we know McCotter isn’t John Galt…is he related to the big 3? Is this who donates to McCotter’s campaign?
Dr Evil on November 20, 2008 at 2:08 PM
Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies.
- Groucho
MB4 on November 20, 2008 at 2:13 PM
I work for a tier 2 Chrysler supplier, and they have been increasing their demand for our parts through the roof so that they can cry poor to the government and look like they have all these “expenses” to cover. Then when they get the money they are going to horde it, ramp down their demand and cause all of us suppliers to shut down. So IF they get the bailout, it will actually hurt the economy a lot more than if they have to actually, you know, manage their supply chain.
rightallthetime on November 20, 2008 at 2:15 PM
700 billion here, 25 billion there. 35 billion over there…I hope they don’t start talking about some real money.
I don’t think man has been on this earth for a trillion seconds yet.
right2bright on November 20, 2008 at 2:16 PM
Is it just me, or is anyone else anxious to see Barack BAILOUT his brother in Kenya?!
LadinPlaid on November 20, 2008 at 2:17 PM
If we were ever actually taxed for this insane spending, there’d be a revolt. Thankfully, we can just put it on the national credit card and no-one really cares.
lodge on November 20, 2008 at 2:18 PM
Relax. Obama will sort it all out.
LimeyGeek on November 20, 2008 at 2:19 PM
You can put lipstick on a pig, but it’s still a pig. We’ve been totally trashed by these idiots in Washington.
therightwinger on November 20, 2008 at 2:22 PM
Dingy Harry says there is no deal.
But of course, once some arm twisting and lobbying is done, there will be. *sigh*
lodge on November 20, 2008 at 2:26 PM
McCotter- Would you buy a used car from this man? Really isn’t that is what is going on, we have car salesman trying to sell us a lemon.
Dr Evil on November 20, 2008 at 2:27 PM
I just have to say that it is good to know that we have so many people who could easily run auto companies sitting in Congress. These Congressmen are certainly giving up a lot (being the corporate geniuses they obviously are) by not running car companies and, instead, serving us all in Congress. I can’t wait to see how many other industries our Congressmen know how to run. I also can’t wait to see what industry killing enviro-nut rules our business geniuses in Congress come up with.
Sheesh.
progressoverpeace on November 20, 2008 at 2:27 PM
After He Who Shall Not Be Named throws out all of our trade agreements in favor of a bunch of protectionist policies, we will be mandated to buy only official state approved Green Mobiles. Biden will tell us it is our patriotic duty.
Laura in Maryland on November 20, 2008 at 2:31 PM
One other point – if gas prices continue to go down or stabilize, and the credit markets open up, the auto companies have a long term prayer of pulling through (assuming they renegotiate their union contracts again of course).
We do have to pray that at least one of them survives, or there will be a domino effect such as we have not seen in our lifetime. It’s not just the auto workers, local dealerships, parts makers, and other direct auto industry relationships, it’s local radio and tv stations who depend on local auto dealers advertising to stay in business, advertising agencies, and so forth.
Buy Danish on November 20, 2008 at 2:31 PM
McCotter, Blink twice if they have a gun held to your back?
What? They said, you won’t be able to get elected dog catcher if you don’t get them how much “tax payer dollars” that sure is a lot of sheckles…are we ransoming politicians now? I wonder if it is cheaper to get a new model what is the trade in value the blue book sticker price on a roughly used Republican US Congressman? I bet we could get the dents knocked out;)
Dr Evil on November 20, 2008 at 2:32 PM
Look, McCotter is a Republican that’s getting lots of votes from UAW members. The membership is pretty darn conservative. They want to work. They want to earn good wages. They want to assemble cars consumers want to drive.
They don’t want to assemble government mandates. The UAW leadership is a different story. You can’t back Democrats when they’re telling you exactly how they are going to tie your hands behind your back and then ask you to assemble a vehicle. That’s exactly what the regulations for environmental reasons do.
gabriel sutherland on November 20, 2008 at 2:34 PM
Doesn’t the last few years tell us that folks DON’T really want to buy gas guzzlers?
DeathToMediaHacks on November 20, 2008 at 2:39 PM
A trillion seconds is only about 30,000 years.
Depends on how far back you call our ancestors “man.”
Count to 10 on November 20, 2008 at 2:40 PM
Circling the bowl.
ronsfi on November 20, 2008 at 2:40 PM
Here is where it gets weird. If I’m remembering correctly, a larger fraction of the parts that go into BIG 3 cars are imported than the parts that go into Toyotas and Nisans. So protectionism would protect Toyota and Nisan at the expense of the Big 3.
Count to 10 on November 20, 2008 at 2:43 PM
McCotter’s got to support the Big 3. His district (Detroit’s northwestern suburbs) becomes a ghost town if the Big 3 go under. If we have to eat this deal, better to have someone pulling it in a direction toward sanity, such as McCotter, rather than let Conyers dictate the terms unchallenged.
either orr on November 20, 2008 at 2:55 PM
I want to wake up from this Socialist Nightmare that is repetion of one bail out after another. Some pundit called it bail out fatigue. Look The Socialist are In Power, that is the state of the Union, that is what shape the Republic we are currently being taken down. The Democrats are running the Country into a Pit without a Bottom. Where do they think they will go when there is nothing left? Is there another Country holding Spots open for them? The Progressive-Democrats, are behaving like Carion on a Carcass. This is a video of vultures picking at Wildebeast Carcass. The Vultures remind me of the current Democrat Leadership.
http://www.youtube.com/watch?v=wwN_WVJ-5RA&feature=related
I’ll give McCotter benefit of the doubt, that he is trying to survive in a climate that is not politically friendly to him or his state.
I do believe we are circling the drain.
Dr Evil on November 20, 2008 at 2:57 PM
“that is the shape of the Republic”
Dr Evil on November 20, 2008 at 2:58 PM
The more I hear from this guy, the more I like him
Vashta.Nerada on November 20, 2008 at 3:03 PM
No – they tell us the opposite. Trucks and SUVs outsold cars in the US until around June of this year.
Vashta.Nerada on November 20, 2008 at 3:05 PM
Years? Hardly. See this page of googled stories. The demand goes up and down depending on gas prices, but ultimately families want and need larger vehicles. Indeed, the demand for SUVs is right back up again.
The demand for itty bitty overpriced Prius’ is not there in significant numbers for families.
Buy Danish on November 20, 2008 at 3:15 PM
Oops, forgot to complete my last sentence:
The demand for itty bitty overpriced Prius’ is not there in significant numbers for families and no amount of Congressional intervention and mandates will change that fact.
Buy Danish on November 20, 2008 at 3:17 PM
This won’t work and the Democrats will bloat the thing once they take over anyway. Why not let them take the credit?
Greenie nonsense in this economy is insanity and there’s no way that will be omitted. Why can’t Bush and his crooked Republicans just say no, stop doing damage, shut up, and let the (D) leftists do it next year?
What the Republicans are doing is the same as calling Amnesty something different. The public got wise to the ways of government and rejected it. Everything Bush and his Republican enablers touch turns to s*it and it’s catastrophe every time he comes out of his office.
I guess it’s easier for them to keep fooling themselves than it is to keep fooling the voters. Welcome back, Boehner.
Feedie on November 20, 2008 at 3:40 PM
I listened the democrat presser after the hearings today, Pelosi, Reid, Frank. Pelosi said the words “accountability” and “viability” (or versions thereof), more times than my teenager uses the words “um” and “like”. She was like a broken record. Clearly, they need to use shorter needles for her botox injections.
Over30 on November 20, 2008 at 5:16 PM
Ed,
Toyota and Honda don’t outsell the Detroit 3, period. GM, Ford & Chrysler sold 55% of the cars in October.
Also, I’m no fan of perks but the brouhaha about the private jets is really silly – unless you think there can be no justification for a business to have a corporate jet at all. The jets are already owned or leased by the companies. The executives are making a lot of money. Frankly I’d rather have Mullaly working in Dearborn than standing in line to go through security at the airport. Flying commercial vs private adds about 3 hours to travel time and would save about $10,000. I don’t know what kind of jet GM owns but it’s probably big enough to seat the CEO’s entire entourage. When you figure how much the CEO and other high execs with him/her make an hour flying private saves money.
rokemronnie on November 21, 2008 at 2:23 AM
Good points. If the auto CEO’s were smart they would have said the same thing.
Personally, I like how Congress skated by without noting that the first $25 billion, already suthorized, is just so that Detroit can start producing the cars that Congress has decided must be produced. This Congress will kill every industry it can get its hands on, and that will start dawning on people soon.
progressoverpeace on November 21, 2008 at 2:32 AM
Good points, all. Unfortunately perception is reality and the bad p.r. gave the Dems an opening. They are fooling a whole lotta fools into thinking they actually give a flip about ‘accountability’.
Come
JanuaryObamuary, they will be doling out billions of our money to their union base with Henry “global warming” Waxman making the rules – which will end in disaster far greater than any climate change apocalypse tale.Buy Danish on November 21, 2008 at 7:36 AM
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