Bloomberg, “Democrats, White House Said to Agree on Automaker Aid.”
The breakthrough came when House Speaker Nancy Pelosi said $25 billion in Energy Department funds for the development of fuel-efficient vehicles could be used to keep the automakers operating if there is a “guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative.”
- Detroit News, “Congress, White House zero in on auto aid plan.”
- Detroit Free Press, “Pelosi drops opposition to tapping plant aid“
Wall Street Journal, “Detroit Bailout Nears a Reprieve:”
White House press secretary Dana Perino termed the discussions “constructive” on Saturday but stopped short of declaring a final deal had been reached.
“We have had constructive discussions with members of Congress from both houses, and both sides of the aisle,” she said in a statement. “We hope to continue to make progress toward assistance for the automakers based on important principles,” including use of the existing auto loan program and “very strong taxpayer protections.”
UPDATE (Noon): An editorial in today’s Wall Street Journal takes a jaundiced tone, “Bridge Loan to Nowhere“:
All three CEOs also drove to Washington in hybrid vehicles as penance for their private-jet flights back in November. This bit of political obeisance was supposed to show that they’d gotten religion both on their perks and their carbon footprint. But it may not have been enough. One Congresswoman wanted to know why they couldn’t hit a 50-mpg fuel-economy target by 2015. Another asked whether, maybe, they weren’t selling enough cars because everyone in America was waiting with baited breath for the coming revolution in fuel economy.
After Barney Frank was done roughing up the CEOs, he hustled them out to hear from David Friedman of Union of Concerned Scientists and Jeffrey Sachs of the Earth Institute. Mr. Friedman warned the Members not to give one inch on fuel-economy standards and not to relax the environmental strings attached to the $25 billion Congress has already made available to the car companies.
You get the picture. If there was ever any question whether Congress actually wants to “save” Detroit, this week dispelled it. This is not a bailout that Congress is debating. It is a federal takeover. We don’t mean that in the sense that the feds will own the companies on paper, although that can’t be ruled out. What Congress wants to own is their business plan, and Detroit seems prepared to oblige.
It is a weird dynamic, to be sure. Congress imposes anti-market regulations and environmentally inspired mandates that make it difficult to turn a profit, and when Detroit cries uncle, provides just enough money to keep things going until another round of anti-market regulations and environmentally inspired mandates can be imposed. Is that what they mean by sustainable growth?
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