GOP Pans Obama’s Auto Bailout Plan
Updated: 2:24 p.m.
Lawmakers in the House and Senate wasted little time reacting to the Obama administration’s plan to try to save domestic automakers, with top Democrats hailing the plan as key to maintaining a viable industry and Republicans denouncing the proposal as an inappropriate government intrusion in the market.
Senate Majority Leader Harry Reid (D-Nev.) praised President Barack Obama’s announcement as a necessary move to ensure General Motors and Chrysler survive.
“I share the President’s commitment to these objectives, and commend his Administration for showing a firm resolve in its negotiations with GM and Chrysler,— Reid said in a statement. “We will not give these companies a blank check. As we have maintained since the earliest days of this crisis, if these companies do not develop strong plans to remain viable in the long term, they will lose our support.—
Speaker Nancy Pelosi (D-Calif.), while striking a more measured tone, said she supports Obama’s goals and wants to work with the White House to get the U.S. auto companies back on track.
“I share President Obama’s goal of a viable and competitive domestic automotive industry, which is an essential part of America’s manufacturing base and our national security, and a critical source of green jobs for the future … Congress is committed to working with the President to renew the auto industry so it can become a global, competitive, and innovative leader in fuel efficiency and in advanced energy-efficient technologies that reduce our dependence on oil and protect our environment,— Pelosi said.
But Senate Republicans largely panned the proposal.
Minority Leader Mitch McConnell (Ky.) called the decision a “disappointment— and argued the administration should have tied previous bailout funds to reform.
“In spite of tens of billions of taxpayer dollars and many promises to reform the way they do business, it’s clear that management, unions and investors have not yet produced viable plans that would allow the companies to survive without massive infusions of taxpayer dollars. This is a disappointment: How many times do the taxpayers have to provide bailout money on the promise of reform,— McConnell said.
Senate Republican Conference Chairman Lamar Alexander (Tenn.) called the plan a waste of federal dollars and criticized the government’s increasing involvement in the management of private companies.
“This is not the right direction: taxpayer money down the drain and Washington politicians trying to run auto companies. The sooner the politicians get out of the way, the sooner auto jobs and taxpayer dollars will be secure,— Alexander said.
Likewise, Sen. Bob Corker (Tenn.), who was the lead Senate Republican negotiator during last fall’s auto industry bailout negotiations, called the forced resignation of GM CEO Richard Wagoner a “sideshow— designed to distract from what he termed a lack of progress by the administration in addressing the industry’s woes.
“The administration is hoping the media and the public will stay focused on Wagoner and fail to notice that negotiations have not progressed since December,— Corker charged.
Corker also called the heightened involvement of the federal government in the management of these companies an inappropriate expansion of the government’s role in the private sector. He predicted that his fellow lawmakers would begin to “kowtow— to the administration to try to keep auto plants alive in their home states and districts.
“It’s been a long time since Washington has seen the kind of kowtowing that’s about to occur among Members of Congress trying to curry favor with the administration to keep plants in their states open,— Corker said.
He added: “This is a major power grab by the White House on the heels of another power grab from [Treasury] Secretary [Timothy] Geithner who asked last week for the freedom to decide on his own which companies are systemically’ important to our country and worthy of taxpayer investment and which are not. … This is a marked departure from the past, truly breathtaking, and should send a chill through all Americans who believe in free enterprise.—
House Republican Policy Committee Chairman Thaddeus McCotter (Mich.) questioned why Obama had forced Wagoner to resign while allowing the top executives of financial firms receiving bailout funds to remain at their companies.
“Now, Mr. Wagoner has been asked to resign as a political offering despite his having led GM’s painful restructuring to date. Mr. Wagoner has honorably resigned for the sake of his company’s working families. When will the Wall Street CEO’s receiving TARP funds summon the honor to resign? Will this White House ever bother to raise the issue? I doubt it,— McCotter said.
But Rep. Darrell Issa (Calif.) broke with his Republican colleagues and praised Obama’s plan. “President Obama has struck the right chord in seeking balance between supporting the American auto industry and calling for a much-needed restructuring of GM and Chrysler. The time to defer tough decisions has long since passed. We have now turned our focus to providing the proper framework for a significant and necessary reorganization to occur,— Issa said.