We appear to be at an impasse, Senate Republicans are unhappy with the provisions of the auto industry rescue bill that passed the House last night. While they are signalling that they would back legislation with a stronger role for the “car czar” and some also want a bondholder and UAW pension cram-down, the House has recessed and Speaker Nancy Pelosi has said she will not reconvene the House to consider a different version of the plan.
So will the Senate blink? The press reports suggest not (and I suspect that the Senate is showing a bit of TARP backlash, that having been sold a bill of goods once, they are in no mood to sign a second blank check. Many believe, correctly, that the $14 billion rescue is a first installment and the program could become an AIG-like sinkhole).
The assumption is that Paulson would step into the breach with TARP funds. However, the Administration has been silent, instead voicing support for the House bill and presumably hoping that matters will sort themselves out.
The Bush administration’s $14 billion automaker bailout plan and other alternatives lack the votes to pass the Senate, as lawmakers seek to beat a deadline to keep General Motors Corp. and Chrysler LLC from collapsing.
GM and Chrysler are in a race against the clock as they need federal aid to keep from running out of cash early next year. Pressure is mounting on GM as a small number of partsmakers ask for payments in advance…
“It’s going to be really hard for anything to get to 60” votes needed to overcome delaying tactics, said South Dakota Republican John Thune.
Senate Majority Leader Harry Reid said he’s working on an agreement that would let the Senate consider Democratic legislation approved yesterday by the House, as well as a slightly different version by Senate Democrats and a Republican alternative…
“This proposal isn’t nearly tough enough,” Senate Republican Leader Mitch McConnell, a Kentucky Republican, said on the Senate floor. “We simply cannot ask the American taxpayer to subsidize failure.”
Senator Bob Corker, a Tennessee Republican, is offering an alternative that would require bondholders to take 30 cents on the dollar and would set wages similar to foreign companies such as Volkswagen AG. It also would give the United Auto Workers union half of the $23 billion it’s owed for health care as GM stock instead, and eliminate a program in which UAW workers are paid not to work if there’s no work for them…
The House and Senate Democratic plans have a few differences. The House plan has language that may force automakers to comply with state emissions laws and an amendment that would require financial institutions that receive bank- rescue funds to report any change in lending….
GM has said it needs $4 billion this month, the same amount in January and a total of $10 billion to keep going through March 31…
Job losses would total 2.5 million to 3.5 million from an automaker failure in 2009, including 1.4 million people in industries not directly tied to manufacturing, according to a Nov. 4 report from the Center for Automotive Research, which does studies for government agencies and companies.
Federal, state and local governments would lose $108.1 billion in taxes over three years in the event of a 50 percent reduction in U.S. automaker operations, representing the failure of one or more domestic automakers, the Ann Arbor, Michigan-based group said.
“We should not go home and do nothing,” Republican Senator David Vitter of Louisiana said today in a Bloomberg Television interview. “We should do the right thing, which is to put the plan together with taxpayer help, but that demands a restructuring plan now,” said Vitter, who had threatened to use procedural methods to halt a vote.
Deputy White House Chief of Staff Joel Kaplan said today the Bush administration is “going to try like heck to get the votes” from rebellious Senate Republicans. Kaplan said he would be on the phone lobbying this morning.
Pelosi said on Bloomberg Television, “You never say never, but the fact is, I think it’s important for the Senate to know that this is a strong bipartisan bill.”
From the New York Times:
The prospects of a $14 billion government rescue of the American auto industry seemed to vaporize Thursday morning as the Senate Republican leader, Mitch McConnell of Kentucky, spoke out forcefully against the bill, effectively dooming its chances despite the urgings of the White House…..
Democrats have indicated that the vote on the auto rescue plan was almost certainly the last major action by the House in this Congress, and they have suggested that if Senate Republicans balk, the Bush administration may have no choice but to find alternative ways to prevent G.M. and Chrysler from financial collapse.
The Senate majority leader, Harry Reid of Nevada, challenged Republican senators earlier Thursday to propose an alternative to the measure approved by the House and to allow swift votes on the competing plans. Mr. McConnell answered that challenge a short while later, saying the Republicans would oppose the White House plan….
Because of the procedural hurdles, Mr. Reid could not force a vote on the auto measures on Thursday. If the Republicans refuse to allow immediate votes, he has laid the groundwork for a vote Friday morning that would end the discussion if Republicans refused to support the bill.
Mr. Reid in his floor speech told Republicans to put forward a plan, if they thought they could do better.