'Car czar' would oversee auto bailout
Post to have power to revoke $15 billion in loans. Congress negotiates with White House to resolve sticking points
By Julie Hirschfeld Davis
Associated Press
POSTED: 08:22 a.m. EST, Dec 09, 2008
WASHINGTON: Congressional Democrats and the White House worked to resolve their last disputes Monday over terms of a $15 billion bailout for U.S. automakers — complete with a ''car czar'' to oversee the industry's reinvention of itself.
The plan could come to a vote as early as Wednesday.
Top Democrats gave the White House their proposal for rushing short-term loans to Detroit's Big Three through a plan that requires that the industry remake itself to survive. The Bush administration had a cool initial response, saying the measure didn't do enough to ensure that only viable companies would get longer-term federal help. Negotiators worked into the night Monday to resolve differences.
President George W. Bush said it was ''hard to tell'' whether a deal was imminent because definite conditions must be met. ''These are important companies, but on the other hand, we just don't want to put good money after bad,'' he said in an interview with ABC's Nightline.
Despite optimism on both sides that Congress and the White House could reach a swift agreement on the measure, it was still a tough sell on Capitol Hill.
''While we take no satisfaction in loaning taxpayer money to these companies, we know it must be done,'' said Senate Majority Leader Harry Reid, D-Nev. ''This is no blank check or blind hope.''
The bill puts a government overseer named by Bush — a kind of ''car czar'' — in charge of setting guidelines for an industrywide overhaul, with the power to revoke the loans if the carmakers aren't taking sufficient steps to reinvent themselves.
House Speaker Nancy Pelosi, D-Calif., said the restructuring would require tough concessions from management, labor, creditors and others.
''We call this the barbershop. Everybody's getting a haircut here,'' Pelosi said.
Tightening conditions
Still, the White House said a preliminary look at the draft didn't appear to contain strict-enough conditions to ensure that long-term financing would be available only to companies that could survive, according to officials who would comment on the continuing negotiations only on condition of anonymity.
The crux of the White House's concern is that there may not be enough clear, immediate protection for taxpayers if a company is not meeting its own promises for long-term viability. The latest proposal suggests Congress may have to get involved again in a few months and pass a law to force a company to stick to its plan — a potentially unwieldy political step.
Rep. Barney Frank, D-Mass., the House Financial Services Committee chairman who is leading negotiations on the measure, said he was optimistic that the differences could be resolved.
Sen. Carl Levin, D-Mich., a key ally of the auto industry, said getting the roughly 15 Republicans needed to support the plan was an uphill battle.
Partisan disputes
Even sympathetic Republicans weren't ready to sign on. Sen. George Voinovich of Ohio has ''numerous concerns'' about the bill, including the strength of the taxpayer protections and the role of the so-called car czar, said spokesman Chris Paulitz.
There are lingering differences between the administration and Congress on details of the czar's role and responsibilities, essentially a proxy fight between the White House and Democrats over whether Bush or President-elect Barack Obama should have the final say on who runs the auto industry restructuring.
Democrats are pressing to allow the president to choose other people besides the czar to help oversee the bailout, while the White House wants just one person tapped by Bush to have control.
Republicans in Congress and the White House also are balking at a requirement Democrats included in their proposal that the carmakers drop their opposition to efforts by California and several other states to impose stricter emissions rules than the federal standard.
Pelosi is seeking that bar at the behest of environmentalists who are angry that money to bail out the auto industry will be drawn from a loan program that was meant to help the Detroit Three build greener vehicles that burn less gasoline.
That's just one of several restrictions the bill places on the automakers while they're receiving the loans.
General Motors Corp. and Chrysler LLC have said they need at least $14 billion combined to keep operating through March. Ford doesn't plan to take any funding.
GM vows to comply
A statement from GM said the company could abide by the plan's provisions.
''Millions of jobs, America's manufacturing base and future competitiveness hang in the balance and we urge quick passage of this bill,'' GM's statement said. ''We will abide by the conditions proposed in the bill and will continue our restructuring with great urgency.''
Among the requirements in the Democrats' draft proposal is one that the automakers getting federal help get rid of their corporate jets — which became a potent symbol of the industry's ineptitude when the Detroit Three chief executives used them for their initial trips to Washington to plead before Congress for government aid.
The automakers also would be subject to some of the same restrictions imposed on banks as part of the $700 billion Wall Street bailout, including limits on executive compensation, a prohibition on paying dividends, and requirements that the government share in future profits and taxpayers be repaid before any other shareholders.
The special inspector general overseeing the Wall Street rescue also would keep tabs on the automaker bailout. The Senate on Monday confirmed Neil M. Barofsky, a federal prosecutor in New York, for that post.
The proposed automakers' bailout also gives the car czar say-so over any major business decisions by the companies while they're taking advantage of federal aid.
Bloomberg News contributed to this report.
WASHINGTON: Congressional Democrats and the White House worked to resolve their last disputes Monday over terms of a $15 billion bailout for U.S. automakers — complete with a ''car czar'' to oversee the industry's reinvention of itself.
The plan could come to a vote as early as Wednesday.
Top Democrats gave the White House their proposal for rushing short-term loans to Detroit's Big Three through a plan that requires that the industry remake itself to survive. The Bush administration had a cool initial response, saying the measure didn't do enough to ensure that only viable companies would get longer-term federal help. Negotiators worked into the night Monday to resolve differences.
President George W. Bush said it was ''hard to tell'' whether a deal was imminent because definite conditions must be met. ''These are important companies, but on the other hand, we just don't want to put good money after bad,'' he said in an interview with ABC's Nightline.
Despite optimism on both sides that Congress and the White House could reach a swift agreement on the measure, it was still a tough sell on Capitol Hill.
''While we take no satisfaction in loaning taxpayer money to these companies, we know it must be done,'' said Senate Majority Leader Harry Reid, D-Nev. ''This is no blank check or blind hope.''
The bill puts a government overseer named by Bush — a kind of ''car czar'' — in charge of setting guidelines for an industrywide overhaul, with the power to revoke the loans if the carmakers aren't taking sufficient steps to reinvent themselves.
House Speaker Nancy Pelosi, D-Calif., said the restructuring would require tough concessions from management, labor, creditors and others.
''We call this the barbershop. Everybody's getting a haircut here,'' Pelosi said.
Tightening conditions
Still, the White House said a preliminary look at the draft didn't appear to contain strict-enough conditions to ensure that long-term financing would be available only to companies that could survive, according to officials who would comment on the continuing negotiations only on condition of anonymity.
The crux of the White House's concern is that there may not be enough clear, immediate protection for taxpayers if a company is not meeting its own promises for long-term viability. The latest proposal suggests Congress may have to get involved again in a few months and pass a law to force a company to stick to its plan — a potentially unwieldy political step.
Rep. Barney Frank, D-Mass., the House Financial Services Committee chairman who is leading negotiations on the measure, said he was optimistic that the differences could be resolved.
Sen. Carl Levin, D-Mich., a key ally of the auto industry, said getting the roughly 15 Republicans needed to support the plan was an uphill battle.
Partisan disputes
Even sympathetic Republicans weren't ready to sign on. Sen. George Voinovich of Ohio has ''numerous concerns'' about the bill, including the strength of the taxpayer protections and the role of the so-called car czar, said spokesman Chris Paulitz.
There are lingering differences between the administration and Congress on details of the czar's role and responsibilities, essentially a proxy fight between the White House and Democrats over whether Bush or President-elect Barack Obama should have the final say on who runs the auto industry restructuring.
Democrats are pressing to allow the president to choose other people besides the czar to help oversee the bailout, while the White House wants just one person tapped by Bush to have control.
Republicans in Congress and the White House also are balking at a requirement Democrats included in their proposal that the carmakers drop their opposition to efforts by California and several other states to impose stricter emissions rules than the federal standard.
Pelosi is seeking that bar at the behest of environmentalists who are angry that money to bail out the auto industry will be drawn from a loan program that was meant to help the Detroit Three build greener vehicles that burn less gasoline.
That's just one of several restrictions the bill places on the automakers while they're receiving the loans.
General Motors Corp. and Chrysler LLC have said they need at least $14 billion combined to keep operating through March. Ford doesn't plan to take any funding.
GM vows to comply
A statement from GM said the company could abide by the plan's provisions.
''Millions of jobs, America's manufacturing base and future competitiveness hang in the balance and we urge quick passage of this bill,'' GM's statement said. ''We will abide by the conditions proposed in the bill and will continue our restructuring with great urgency.''
Among the requirements in the Democrats' draft proposal is one that the automakers getting federal help get rid of their corporate jets — which became a potent symbol of the industry's ineptitude when the Detroit Three chief executives used them for their initial trips to Washington to plead before Congress for government aid.
The automakers also would be subject to some of the same restrictions imposed on banks as part of the $700 billion Wall Street bailout, including limits on executive compensation, a prohibition on paying dividends, and requirements that the government share in future profits and taxpayers be repaid before any other shareholders.
The special inspector general overseeing the Wall Street rescue also would keep tabs on the automaker bailout. The Senate on Monday confirmed Neil M. Barofsky, a federal prosecutor in New York, for that post.
The proposed automakers' bailout also gives the car czar say-so over any major business decisions by the companies while they're taking advantage of federal aid.
http://www.ohio.com/news/nation/35793994.htmlMicro Sez The whole thing is a parody of itself by now.
