Automakers Denied Bailout Funds, Bush May Intervene
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The Detroit Three
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Defiant Republicans in the Senate defeated a $14 billion dollar emergency automaker loan late Thursday. The final tally for the vote was 53-35, seven votes shy of the required 60 to pass the legislation.
"We are about three words away from a deal", said Sen. Bob Corker, R-Tennessee.
| Public opinion remains divided on the issue, with just 39 percent voicing approval of automaker loans according to the Pew Research Center. A similar poll conducted by Marist College showed a 41 percent approval rating.
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The bill went south after Senate Republican leader Mitch McConnell of Kentucky joined several Republican Senators in opposition of the White House-backed bill. The measure had previously passed by a wide margin in the House of Representatives after a compromise deal between Congressional Democrats and the White House had been reached.
"It's disappointing that Congress failed to act tonight," said the White House in a statement following the defeat. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."
The major sticking point came from disagreements over wage concessions on domestic auto workers. Intense negotiations between senators, the White House and UAW officials had delivered a compromise package that would have adjusted UAW worker wages at the conclusion of their current contract in 2011. According to the Center for Automotive Research, UAW workers make an average of $3 to $4 per hour more than their non-union counterparts.
Opponents to the bill wanted immediate concessions to bring pay scales in line with foreign manufacturers.
"We will leave here tonight and go home for the holiday recesses," said Sen. Chris Dodd, D-Conn., shortly before the cloture vote. "But for the literally hundreds of thousands of people whose jobs depend upon this industry, this will not be a joyous season wondering whether or not their jobs, their livelihoods, their homes, their children's futures are at risk because we were incapable of coming up with an answer."
Speaking to WWJ radio in Detroit, Michigan Governor Jennifer Granholm said she was speechless over the decision to "give up our (manufacturing) power" and encouraged listeners to email the White House requesting action.
"His legacy has an opportunity to rebound," said Granholm, referring to President Bush. "I do believe he will act, he must act and save this U.S. economy."
General Motors and Chrysler have repeatedly said they likely do not have funding to maintain their operations through the end of the year. Studies suggest that even a partial collapse of the domestic auto industry could be disastrous for a U.S. economy already in a deep recession, a position supported by many economists.
"I dread looking at Wall Street tomorrow," said Senate Majority Leader Harry Reid after the vote. "It's not going to be a pleasant sight."
Attention now turns back to President Bush and whether he will reverse his stance on tapping emergency cash from the $700 billion dollar TARP fund set aside for financial institutions. Another possibility could be an early January session of Congress, with a larger Democratic influence in the Senate. Congressional leaders also point to the Treasury as having the power to approve emergency loans.
"Given the current weakened state of the U.S. economy, we will consider other options if necessary-including use of the TARP program-to prevent a collapse of troubled automakers," said White House Press Secretary Dana Perino in a statement on Friday.
by Christopher Smith, Autotropolis
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