Wednesday, December 17, 2008
The administration won’t be rushed on a decision, the press secretary said.
WASHINGTON (AP) — Conservative Republicans admonished the White House on Tuesday not to use bank-bailout billions to rescue distressed U.S. automakers, and a key Democrat demanded the government get veto power over the companies’ business decisions as a condition of any aid.
The Bush administration said it was still evaluating options and suggested any deal would require major concessions by all sides. Complicating its task, lawmakers in both parties — having failed in their efforts to push a $14 billion auto rescue through a bailout-weary Congress — were pressing for an array of terms and conditions they said should be part of any Plan B.
“We are not going to be rushed into it,” presidential press secretary Dana Perino declared.
Only a day earlier, President George W. Bush suggested that a rescue package would come sooner rather than later.
“An abrupt bankruptcy for autos could be devastating for the economy,” Bush said on Monday. “This will not be a long process because of the economic fragility of the autos.”
GM and Chrysler have said they will run out of cash within weeks if they don’t get help. Ford Motor Co. has said it has enough cash to survive 2009. The Detroit-based automakers have 20 plants in Ohio. The biggest include a Chrysler LLC complex that makes Jeeps in Toledo and a General Motors Corp. factory in Lordstown that produces the Cobalt and Pontiac G5 fuel-efficient cars.
Conservative Republican lawmakers, many from Southern states that are home to Japanese auto plants, wrote to Bush asking him not to use one of the most readily available pots of money — the $700 billion Wall Street rescue fund — to help the U.S. carmakers.
And the White House and Treasury Department were in talks with Sen. Bob Corker, R-Tenn., who has been pressing for big union concessions in exchange for rescue money, on the terms and structure of a possible bailout, said a senior GOP congressional aide.
Corker came close last week to striking a deal with the United Auto Workers union for a $14 billion bill that would have forced the carmakers to bring their wages and benefits in line with those of Japanese auto companies in the U.S. by a specific date in 2009. The measure collapsed after the UAW refused to agree to wage cuts that quickly. The new contacts with the administration were disclosed on condition of anonymity because the aide was not authorized to divulge them.
Rep. Barney Frank, D-Mass., weighed in as well, urging Treasury Secretary Henry Paulson to adopt the accountability provisions included in a House-passed auto bailout bill — the product of a deal with the White House — as a condition of any bridge loans to U.S. automakers.
That measure would have given a Bush-appointed overseer say-so over any major business decisions by the automakers while they were taking advantage of federal aid, including the power to nix any transaction of $100 million or more.
“Given the serious mistakes that senior auto industry executives acknowledge they have made in the past, such safeguards are absolutely necessary to ensure that taxpayers are protected and that the retooling of this critical industry proceeds as quickly as possible,” Frank wrote to Paulson on Tuesday.
Perino said the administration was still working on details of the package, which could reach $15 billion for General Motors Corp. and Chrysler LLC.
She said concessions had to be made in exchange for the money.
“I don’t think that there’s any possible way that this president would agree to allow taxpayer financing to go toward firms that are not willing to make tough decisions to become viable and competitive in the future,” she said.
Bush said Tuesday that his administration was “considering all options” for helping the automakers, arguing that the already distressed economy could slide further into recession without prompt action.
“What you don’t want to do is spend a lot of taxpayers’ money and then have the same old stuff happen again and again and again,” Bush told CNN in an interview. At the same time, he said, “we’re trying to get this done in an expeditious way.”