- The Washington Times - Saturday, December 13, 2008

Republicans on Friday angrily demanded that President Bush respect the legislative process after the Senate blocked a bailout for the automakers and the White House said that Mr. Bush would consider reversing course and rescuing them using the Wall Street bailout funds.

The automaker bill’s failure sparked a full-blown intraparty war, with several Republicans saying the White House scuttled their efforts to win concessions from the United Auto Workers union and one Republican senator warning that if Mr. Bush goes ahead on his own, Washington “might be completely out of control.”

“How have we come to a point that Congress — the institution that represents the will of the American people — has handed over so much money and authority to the Treasury secretary that, if the democratic process fails to achieve a certain desired outcome, the outcome is simply ignored?” said Sen. James M. Inhofe, Oklahoma Republican.

Still other Republicans, including Rep. Thaddeus McCotter of Michigan, a member of the House Republican leadership, urged Mr. Bush to act to stave off automakers’ “impending bankruptcy and its consequent devastation of working families and the depression of our American economy.”

Senate Republicans on Thursday led a filibuster and blocked Mr. Bush’s $14 billion rescue package, which he had negotiated with Democrats. The bill failed to reach the 60 votes needed to stop the filibuster, with senators voting 52-35 for the bill.

Friday morning, the White House said Mr. Bush would consider using funds from the Troubled Asset Relief Program, created by Congress earlier this year to help financial institutions. Previously, the president had balked at using TARP funds, saying they should not be used to rescue failing auto businesses.

“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary — including use of the TARP program - to prevent a collapse of troubled automakers,” White House press secretary Dana Perino said.

Mrs. Perino also admonished senators for failing to pass a bailout bill.

“It is disappointing that while appropriate and effective legislation to assist and restructure troubled automakers received majority support in both houses, Congress nevertheless failed to pass final legislation,” she said.

But senators said the White House hurt their efforts to win concessions from the unions and get a deal done.

“Had the administration made it unequivocally clear that TARP funds should not be used for this purpose, it is likely a bipartisan, constructive solution to the auto issue would have been reached in the Senate last night,” said Sen. Judd Gregg, New Hampshire Republican.

Sen. Bob Corker, Tennessee Republican and his party’s chief negotiator on the rescue package, said United Auto Workers President Ron Gettelfinger now has no incentive to work out an agreement, knowing Mr. Bush will step in.

Democrats, though, defended the White House.

“I want to tell you, over the last 10 days they were terrific,” said Sen. Christopher J. Dodd, of Connecticut, the Senate Democrats’ chief negotiator. “They brought very good people to the table; they negotiated in great good faith, in my view, had good ideas.”

House Speaker Nancy Pelosi, California Democrat, said if Mr. Bush does release TARP funds, he should attach the same strings to the money that were included in the failed bill.

“That legislation contained tough accountability and strict timelines for the automakers to develop a comprehensive restructuring plan to place them on a path toward viability and competitiveness,” she said in a letter to Mr. Bush. “Failure by the automakers and other stakeholders to act urgently in developing and implementing a restructuring plan would end taxpayer assistance and permit the recalling of all loans.”

Republican senators wanted to have a date certain in 2009 by which the auto unions would have to have a lower pay scale, one comparable to foreign manufacturers such as Nissan and Volkswagen who are producing cars in the U.S.

But Mr. Gettelfinger said the differences among various wage scales were unclear and to determine a level of parity would require research, which he said the union would want to extend to the management teams and supplier contracts for foreign car companies in the U.S.

Mr. Gettelfiner said at a news conference that Republicans wanted the auto industry restructured “on the backs of workers and retirees,” adding that none of the other stakeholders — Big Three management and creditors — were asked to set a date certain for concessions.

Both General Motors Corp. and Chrysler LLC have said they could be just a few weeks away from bankruptcy without the prompt passage of a bill. Ford Motor Co. is in somewhat better short-term shape, but the collapse of even one of Detroit’s Big Three would have huge repercussions throughout the economy. Together, they employ about 3 million people in autoworker and industry-related jobs.

President-elect Barack Obama said Mr. Bush and Congress should keep working on the problem.

“I share the frustration of so many about the decades of mismanagement in this industry that has helped deliver the current crisis,” Mr. Obama said. “Those bad practices cannot be rewarded or continued. But I also know that millions of American jobs rely directly or indirectly on a viable auto industry, and that the beginnings of reform are at hand.”

• David R. Sands and Kara Rowland contributed to this article.

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