VOL. 123 | NO. 239 | Monday, December 8, 2008
Bush, Hill Leaders: Job Losses Argue for Auto Help
By JULIE HIRSCHFELD DAVIS | Associated Press Writer
WASHINGTON (AP) - President George W. Bush and congressional leaders seized on the latest grim unemployment data Friday to try to fire up lukewarm support on Capitol Hill for bailing out U.S. automakers. But they clashed anew over terms of the rescue plan and the source of any aid.
As the Big Three auto chiefs pressed their case for $34 billion in a second day of hearings, Bush said in the Rose Garden that the loss of 533,000 jobs in November was even more reason to help the companies. The worsening U.S. auto sales slump claimed another 2,000 workers, as General Motors Corp. announced layoffs at three more car factories.
Bush said he was worried about the viability of the automobile companies, along with the workers and their families. "And likewise, I am concerned about taxpayer money being provided to these companies that may not survive," he said.
He said Congress should act next week – and make sure that public dollars are repaid.
With just a month and a half left in his presidency, Bush repeated his calls for Congress to rewrite an existing $25 billion program intended to help the industry make more fuel-efficient vehicles.
But congressional budget analysts have said raiding the fuel-efficiency program for a broader auto bailout would net only $7.5 billion in short-term cash.
Democratic leaders and environmentalists oppose changing that program. Instead, they favor other routes, including taking the money directly from a $700 billion financial bailout fund run by the Treasury Department.
The administration insists on reserving that money in the Wall Street bailout for banks and other financial institutions.
While lawmakers pondered a range of options, including a government-run management board, no individual plan seemed to be gaining much footing.
Senate Majority Leader Harry Reid, D-Nev., said the Labor Department's report of the steepest monthly job loss in 34 years makes the auto bailout imperative.
"We must ... prevent the auto companies from collapsing or we risk adding millions of more Americans to the unemployment line," Reid said. He said any help must include requirements to ensure the industry's viability and provide strong oversight.
Auto executives pressed their request for an immediate infusion of up to $34 billion, saying they need the dollars to survive. The request came two weeks after they were sent home empty-handed and told to come back with more detailed plans on how they would spend the money and restructure their companies.
"We believe this is the least costly alternative," Chrysler LLC chief executive Bob Nardelli told the House Financial Services Committee.
Committee Chairman Barney Frank, D-Mass., cited the jobs report showing the 11th consecutive month of losses as all the more reason for Congress to help Detroit.
"For us to do nothing, to allow bankruptcies and failures in one, two or three of these companies in the midst of the worst credit crisis and the worst unemployment situation that we've had in 70 years would be a disaster," Frank said.
He later suggested that the distressing jobs report might help build support for some kind of package to tide the auto companies over until next year – legislation he said would be worked on next week. While acknowledging that deep differences remain, Frank said: "There is a sufficient consensus that we have to do something."
"I am more optimistic than I was before," he said.
Congressional leaders have urged the administration to do more to help the industry with money it already has access to – and thus avoid the need for legislation in a quickly expiring lame-duck Congress. Key lawmakers have also urged the Federal Reserve to give the auto companies the kind of direct low-cost loans the central bank has been giving financial firms.
Outside the Capitol, auto suppliers representing 50 states and wearing blue hockey jerseys emblazoned with the number of supplier jobs in their states gathered.
"This is not a bailout. This is a loan that will help us recover for the future," said Jim Seta, 37, who works at a plant in Gainesville, Ga., owned by supplier SKF. The plant employs 320 and makes bearing parts for transmissions used in General Motors vehicles.
The chief executives from General Motors Corp., Ford Motor Co. and Chrysler LLC had testified for nearly six hours Thursday before the Senate Banking, Housing and Urban Affairs Committee, asking to expand an already unpopular $25 billion request to $34 billion.
Several lawmakers pressed automakers to consider a pre-negotiated bankruptcy. Meanwhile, other members of Congress and the Big Three were contemplating a government-run restructuring that would yield similar results, including massive downsizing and labor givebacks.
President-elect Barack Obama has not offered his own alternative to Bush's plan. Frank said Obama is "going to have to be more assertive than he's been."
Associated Press writer Ken Thomas contributed to this report.
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