$14B auto bailout passes House

McClatchy Newspapers
Published Thursday, December 11, 2008

WASHINGTON -- The House of Representatives passed a $14 billion emergency plan to aid Detroit's ailing auto industry late Wednesday -- but Senate Republicans' doubts about the package put its ultimate fate in serious jeopardy.

The bill's funds could flow quickly to General Motors and Chrysler, which otherwise would face bankruptcy. The measure also would create a "car czar," who would be appointed by the president to dole out the money, and require the companies to restructure themselves to achieve long-term viability.

The bill, said House Speaker Nancy Pelosi, D-Calif., in her closing argument Wednesday, is "not a life support to sustain a dying industry, but a jumpstart for an industry that is essential to our nation's economy."

The measure passed by a 237-170 vote with bipartisan support, but in the Senate, most Republicans -- as well as some Democrats -- voiced concerns, headed by worry that their constituents are reluctant to provide taxpayer money to help GM, Chrysler and Ford. Ford officials have said they don't need help immediately.

Sen. David Vitter, R-La., noted that the measure would require the companies to submit a restructuring plan by March 31. He asked why Congress doesn't demand that plan before the money is lent.

"I think the average American would say, 'What? Isn't that putting the cart before the horse?'" Vitter asked. "Isn't that, to use a common phrase, just ass-backwards?"

Many supporters conceded that they were uneasy about the plan -- a point they made to Democratic leaders in a closed-door caucus -- but publicly said they had little choice.


The bill faces enormous problems in the Senate, where 60 votes are needed to stop procedural delays threatened by the measure's foes. On Wednesday, Vice President Dick Cheney and White House Chief of Staff Joshua Bolten met privately for more than an hour with Republican senators, and according to senators present, they heard a barrage of criticism -- and offered few satisfying answers.

Senators wanted assurances that the government will be tough on car companies that do not recover swiftly once the loans are made, as well as guarantees that taxpayers will not lose billions. And some suggested bankruptcy could be a preferable alternative.



Supporters countered that the bill has strong safeguards against blank checks.

