From CQ Politics:
Democratic leaders of Congress slammed the brakes on efforts by Rust Belt senators to push an auto industry loan through Congress this week, saying they first need to see a plan to make the industry viable going forward.
House Speaker Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada, along with other key Democrats, said Thursday they will give the Big Three until Dec. 2 to submit a proposal in writing to Congress that shows a path to viability that will protect taxpayers and auto workers.
If they do, the Banking committees in both chambers will hold hearings that week, with floor action possible the week of Dec. 8 in a resumed lame-duck session of the 110th Congress.
“Until they show us a plan, we cannot show them the money,” Pelosi said.
The leaders made the announcement BEFORE the Senators Levin and Stabenow and Bond and Voinovich unveiled the proposal to allow the domesic auto industry to draw on previously appropriated $25 billion.
More to shake out, but todays’ developments are very puzzling: If leaderships insists on maintaining the requirements for “green” retooling, while protecting their political allies in organized labor, well, how much room for compromise and maneuvering and industry profitability is there? It sounds like this: “Show us a plan about how you intend to meet our political demands, which will make your failure more likely, and then we might dole out some more money.”
Perhaps we’re missing something. More…
The Street.com, “Congress Wants Plan From Automakers Before Granting Aid“
The Hill, “Dems want business plan from automakers“
UPDATE (4:15 p.m.): A statement from House Majority Leader Steny Hoyer, “Hoyer and Democrats Demand Auto Industry Be Held Accountable; Provide a Plan for Viability“:
As we said this afternoon, Democrats fully understand the importance of America’s automotive industry to our entire economy, and to the 3 million workers who depend on it for employment. We are working with leaders from both parties, and with representatives of the automakers and their employees, in an effort to protect this vital industry from collapse. However, we will not commit billions of taxpayer dollars to this effort without first knowing how the automakers intend to use it to ensure their long-term viability. Our taxpayers and our economy would suffer if we found ourselves back at this point in the near future, with $25 billion gone and the automakers no closer to health. A plan of this size demands detailed accountability to the public.
That is why I, along with the Democratic leadership in Congress, am insisting that the automakers show the American people exactly how they would spend these loans. We need to know that America’s car companies have a plan to remain competitive and viable in the 21st century. Congress has asked for that plan by December 2nd, and both the House and the Senate are prepared to return to consider legislation by December 8th. That time will help us build consensus in Congress and instill public confidence in the car companies’ future. And by then, Congress will have more of the information it needs to determine whether loans to the auto industry are in the public interest. That is the diligence that any lender should exercise—especially when taxpayer money is at stake.
UPDATE (5:30 p.m.): Larry Kudlow looks at the stock market reaction from earlier in the day and that reacts to early reports about the House Democratic leadership’s response:
In any event, let’s see if Washington can put the new deal together — a deal that presumably will suspend the CAFE standards in order to stop a complete Detroit meltdown. What is interesting to me is that the stock market — which is a barometer of the longer-term health of the economy — has now placed itself firmly on the side of an immediate bailout for GM and the others.
As of this writing, Speaker Nancy Pelosi and other House Dems are calling the Bond-Voinovich-Levin deal a non-starter. Hard to believe, but the Pelosi gang would rather preserve the CAFE fuel-mileage standards than bailout the Detroit carmakers.
Greenies of the world unite.
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