"Stubborn Bush Prepares His Final Act: Devastate The Ailing Economy By Letting The Auto Industry Die"
Our guest blogger is Daniel J. Weiss, a Senior Fellow and the Director of Climate Strategy at the Center for American Progress Action Fund.
George Bush’s deep unpopularity, lack of a positive agenda or accomplishments, and his waning days in office have sapped most of his presidential powers save one: the ability to say “no.” His intransigent opposition to long term bridge loans to save General Motors, Chrysler, and Ford has forced Congressional leaders to scramble to provide assistance to prevent bankruptcy, which would devastate the already ailing economy. It appears that there is a tentative deal that will keep GM and Chrysler on life support until the new president and Congress can provide long-term assistance to nurse them back to health.
The possible deal would loan GM and Chrysler up to $17 billion from the Advanced Technology Vehicles Manufacturing Incentive Program, established by Sec. 136 of the Energy Independence and Security Act. This program provides up to $25 billion in loans to retool factories so that they can produce more efficient vehicles that meet new fuel economy standards. Already, the Big Three and smaller innovative start up companies are seeking these funds.
Speaker Nancy Pelosi opposed using these funds for the bridge loans because they are supposed to jump start efforts to build significantly more efficient cars. Taking this money would only delay this critical effort, slowing American companies’ efforts to win the race to build the super efficient cars of the 21st Century.
November’s shocking unemployment figures of another half million people out of work made it imperative that GM and Chrysler avoid bankruptcy. Speaker Pelosi acted responsibly to provide the only solution that Bush and conservative lawmakers would accept:
“Congress is considering various short term funding options for the American automobile industry. We will not permit any funds to be borrowed from the advanced technology program unless there is a guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative. Regardless of the source, all funding needs will be tightly targeted with vigorous supervision and guaranteed taxpayer protection.”
This weekend, Congressional leaders will hammer out the conditions for the loans. These restrictions should include protection of workers and retirees health care and pensions; limits on executive compensation; independent oversight; commitment to continue research, development and production of significantly more fuel efficient cars; and, an agreement that the Big Three will cease their legal and lobbying efforts to block or weaken motor vehicle fuel economy or greenhouse gas standards. Congress could vote on the deal the week of December 8th.
Hopefully, the Department of Energy will not halt the Advanced Vehicle loan program. Its funds could be replenished in January 2009 as part of an economic stimulus package designed to save and create jobs. This bill could also include the additional bridge loan funds necessary to save and rejuvenate the auto companies. The 111th Congress – with more progressives and fewer conservatives — will consider such a bill shortly after it is sworn in on January 6th. This essential economic relief package would then go to the new president, who will do more than just say “no.”