GOP eyes GM takeover as election tool

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Republicans plan to use the government takeover of General Motors Corp. as ammunition in their bid to defeat congressional Democrats next year, saying its a glaring example of big government intrusion into the marketplace that will rankle average voters.

They said the bankruptcy arrangement, which President Obama announced at the White House on Monday, is doomed to entangle politicians in business decisions that are outside their expertise.

“We’ll continue to make the case that President Obama and House Democrats want to do to America’s health care system what they have done to General Motors,” said Paul Lindsay, a spokesman for House Republicans’ campaign arm, the National Republican Congressional Committee. “Having to defend such drastic government intervention paid for with reckless spending and bailouts is not an enviable position for many of these Democrats to be in next year.”

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Democrats, led by the president, intend to use the intervention in the election season as well, but they expect to promote it as necessary to get the company back on track and to save thousands of jobs. Democrats are also banking on the economy getting better.

Senate Majority Leader Harry Reid, Nevada Democrat, stressed that he expected the government’s involvement to be “a short-term stake” and said the government will not interfere with day-to-day operations of GM.

“President Obama’s decision to take a short-term stake in General Motors is driven by our nation’s shared interest in ensuring the American auto industry can survive,” Mr. Reid said.

Republicans said they would challenge that notion whenever they found a chance. Sen. Lindsey Graham, South Carolina Republican, vowed to force a vote to make lawmakers take a stand on the issue. And the topic is already popping up in the hottest Senate race - in which Sen. Arlen Specter switched parties to run as a Democrat in Pennsylvania.

A Republican challenger, Pat Toomey, said the arrangement - in which the government is pumping $30 billion into GM on top of the billions the Bush administration designated last year - is a bad deal. Mr. Toomey’s campaign said Mr. Specter “has been conspicuously silent on the latest round of auto bailouts” and asked whether Mr. Specter will “stand up for taxpayers or will he simply do the Democrats’ bidding?”

Mr. Specter’s Senate office did not make a statement on Mr. Obama’s decision.

In Michigan, which has been brutalized by the collapse of the U.S. auto industry, Gov. Jennifer M. Granholm said the government’s decision to put GM into bankruptcy and to take over much of the company means the worst is about to be over. “We can see that there’s light at the end of the tunnel,” she told CNN.

She acknowledged that the state’s unemployment rate - already the highest in the nation - will increase, but said having Mr. Obama’s backing of the auto industry and the bankruptcy proceedings is the key to restructuring.

Under terms of the arrangement Mr. Obama announced, the U.S. government will name most of the members of a new corporate board, and the company will begin to try to build a smaller, fuel-efficient car. The company will permanently close nine plants and cut 21,000 jobs and 2,600 dealerships in an effort to shed unmanageable obligations.

GM filed for Chapter 11 bankruptcy, and neither the company nor the administration had a guess as to how long the government will control the company.

Even as he was announcing plans that would lead the government to own 60 percent of GM, Mr. Obama sought to put as much distance between himself and GM’s future decisions.

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