House GOP leader slams aid for Detroit

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By David R. Sands

The House's top Republican Thursday attacked plans by leading congressional Democrats to double a $25 billion assistance package for the country's ailing automakers, saying there were no assurances the extra money would be well spent.

House Minority Leader John A. Boehner, Ohio Republican, questioned why House and Senate Democratic leaders were pushing a new $25 billion aid package for Detroit after the House already approved $25 billion in loans to the industry in September.

"Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers' competitiveness around the world is neither fair to taxpayers nor sound fiscal policy," Mr. Boehner said.

Detroit's Big Three General Motors Corp., Ford Motor Co. and Chrysler LLC, staggered by the global credit crunch and by falling consumer demand around the world, racked up major losses this year. General Motors executives say they could run out of cash early next year without outside aid.

The three companies employ some 250,000 workers and indirectly support another 4 million U.S. jobs.

Despite the urging of President-elect Barack Obama, the Bush administration has resisted calls to use some of the $700 billion Wall Street rescue fund to help carmakers.

White House spokeswoman Dana Perino did not rule out a new federal bailout for the car industry, but said the administration was waiting to see what Congress passed and how the money would be spent.

"I think everyone can agree that you wouldn't want taxpayer dollars going to something that would not be a long-time concern," she told reporters at the White House.

On Tuesday, House Speaker Nancy Pelosi directed House Financial Services Chairman Barney Frank to begin drafting a bill to authorize the Treasury Department to use some of the massive bailout fund for Detroit. She said the bill also would include new limits on pay packages for auto executives and could give the federal government an ownership stake in the companies in exchange for the aid.

Mr. Boehner said Thursday the government should be demanding more.

"Why have the Democratic leaders of Congress been willing to provide this money without insisting that the companies receiving these federal dollars demonstrate to Congress and to taxpayers that they have credible plan to strengthen their financial health?" he asked. "And what assurances will Democrats give taxpayers about their chances of getting their auto bailout money back?"

Congress is expected to reconvene next week for a lame-duck session that might consider both the auto aid bill and a new economic stimulus package to bolster the U.S. economy.

The Big Three auto makers, the United Auto Workers union and officials from Michigan and other Midwestern states have lobbied for additional federal aid and say tying too many strings to the money could undermine the rescue effort.