Delaying the Loans to the Automakers

By October 22, 2008Economy, Energy

From today’s Washington Post, Page A1, “Lifeline for Automakers Dangles Just Out of Reach“:

A $25 billion loan program rushed through Congress to revive the nation’s ailing domestic auto industry may not deliver any money to Detroit for more than a year, federal officials said, prompting concern that the cash may come too late to prop up one of the country’s most important manufacturing sectors.

In recent days, auto industry representatives and lawmakers from Michigan, Kentucky and other states where auto plants employ tens of thousands of workers have begun clamoring to pry the funds loose, prodding the Bush administration and questioning the reasons for the delay. Federal officials have said it would take months to finalize the rules for distributing funds.

Specifically, the Department of Energy states may take six to 18 months to make the funds available to the companies. Congress wrote into the law the requirement that the regulations be completed within 60 days, but there are, to no one’s surprise, many other regulatory hurdles to jump. Not only are there environmental rules, the Congressional Review Act requires a 60 day period so Congress can review the regs before they go into effect.

Congress has the power to waive all these requirements — and add protection against lawsuits, too, for that matter — should have written the waivers into the current law and should darn well write them into any legislation that passes a lameduck session in November.

NAM President John Engler addressed the issue in a speech on October 13 to the Detroit Economic Club:

I was alarmed last week to read that the Department of Energy thinks it may take months to work out the loan details. This is the same department that took more than two years to implement loan guarantees for the nuclear power industry and then failed to get them right. GM, Ford and Chrysler need help now.

So, today, I call on the White House to intervene and ensure that these loans are processed promptly. Look at the treatment of General Motors and Ford in the markets last week – rising bond yields and plummeting stock prices are ominous signs. It’s not a time for meetings; it is a time for action.

Let’s have both Congress and the DOE act. Now.

For more news coverage on the issue, go here.


Join the discussion One Comment

  • Karl says:

    Boy, it takes Paulson one Sunday to bail out Bear Stearns and he can’t get a LOAN to an American company that creates jobs for over a year? Once again showing that that guy takes care of his own and screw the rest.

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