Pelosi Says She's 'Not Heard' from Obama Administration on Whether Congress Needs to Approve Automaker Bailout

May 6, 2009 - 4:01 PM
The auto bailout and government-supervised restructuring plan is an executive branch matter, and it is not something that Congress will get involved in unless asked, House Speaker Nancy Pelosi (D-Calif.) said Wednesday.

House Speaker Nancy Pelosi (CNSNews.com/Penny Starr)

Capitol Hill (CNSNews.com) – The auto bailout and government-supervised restructuring plan is an executive branch matter, and it is not something that Congress will get involved in unless asked, House Speaker Nancy Pelosi (D-Calif.) said Wednesday.
 
"If and when the Administration thinks that there should be legislation, then we will take that up," Pelosi said at her press conference yesterday.

"We have not heard, I have not personally heard from the executive branch that they need any legislative remedies," she said.

The Bush administration initiated a federal bailout of the auto industry, with $17.4 billion in bridge loans to Chrysler and General Motors in late 2008, using money from the Trouble Assets Relief Program (TARP) even though Congress had specifically rejected legislation to authorize a bailout of the auto industry and the $700 billion bailout approved by Congress for TARP was desiganted by law only to be used for  “financial institutions”--such as banks, savings and loans and credit unions. 
 
Since President Barack Obama announced the expansion of the program to include at least $1.1 billion toward covering the cost of Chrysler and GM warranties during the restructuring, several members of Congress have said they did not know where the president got the legal the authority to do this.
 
Pelosi said she does not believe legislation is required for the auto restructuring plan.

“If and when the administration thinks that there should be legislation, then we will take that up,” Pelosi told reporters. “But President Bush by and large took that initiative away from us.”
 
An auto bailout bill passed the House in December 2008 but died in the Senate after the United Auto Workers Union failed to make concessions and a cloture vote failed to secure the 60 votes needed to bring the legislation to a final vote on the Senate floor.
 
“We had legislation that required certain things. He (Bush) took some of it and added his own that we weren’t particularly pleased with,” Pelosi continued. “But nonetheless, President Obama has this as an executive branch initiative. We have not heard, I have not heard, from the executive branch that they need legislative remedies.”
 
Pelosi spokesman Brendan Daly told CNSNews.com after the press conference that the speaker was not questioning the authority of either the Bush or the Obama administration to implement the auto bailout.
 
“The executive branch seems to be looking at it and doing it with the auto task force,” Daly told CNSNews.com. “She (Pelosi) believes the administration has the authority.”
 
Daly did not know precisely where the authority came from, but he believed it likely comes from the $700 billion bailout that created the Troubled Assets Relief Program (TARP).
 
In December, a study by the conservative Heritage Foundation concluded that allocating TARP funds to non-financial institutions, in this case auto companies, was not legal under the language of the legislation. Also, former Clinton Labor Secretary Robert Reich said that using money from the TARP legislation to bailout automakers was unconstitutional.
 
But the issue of legality has been vetted by two administrations, White House Press Secretary Robert Gibbs told CNSNews.com in March.  
 
“I think the determination has been made both by the previous administration and the current administration that this assistance is legal, and our goal is to ensure that the taxpayers in any instance when this is used feel confident that it’s being done in a transparent and accountable way,” Gibbs said.
 
Under the law, the $700 billion in bailout funds in the TARP program can only be used on "financial institutoins."  The law says the term financial institution “means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States ...:

Last month, Rep. Barney Frank (D-Mass.), who actually sponsored the auto bailout legislation that passed the House but failed in the Senate, said Congress would not get involved in the Obama administration’s automaker bailout.
 
“It’s an administration situation so I’m not very well informed on it,” Frank told CNSNews.com. “Do the words ‘I’m not very well informed on it’ have any meaning to you? Am I speaking a language you don’t understand? It’s not something I’m focused on. The committee, which I chair, keeps me busy. I have not had a chance to look at that.
 
“I do not have an informed opinion on it. It’s not my understanding that Congress is going to get to vote on it. So I tend to focus on things that are under the jurisdiction of the committee and that we’ll have to vote on. When things are neither, I don’t have a very well-informed opinion,” he added.
 
Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee that oversees TARP, seemed a little puzzled that he did not get a heads up from the White House.
 
“I don’t know whether there is legislative action needed regarding all this. There may be. I just don’t know enough details of this and obviously we’re going to be talking about it,” he said.
 
“I wasn’t consulted at all on the process, not that I expected to be necessarily, but as the committee of some jurisdiction on this matter, I kind of expected I might hear something. I’ve been reading about it in the papers basically,” Dodd added.
 
House Majority Leader Steny Hoyer (D-Md.) said, “The administration clearly believes it does have the authority to use some of the remaining TARP funds for the automobile industry. I don't know, technically. I would be kidding you to mouth some words on that, because I don't know technically where that authority would be.
 
“But my own view is that if it is perceived they don't have that authority and it is perceived by the Congress they need to have that authority, the Congress would probably be willing to give that authority. But I don't know technically the answer to that question,” Hoyer added.
 
Republicans also expressed uncertainty as to where President Obama got the legal authority to provide tax dollars to automakers and guaranty auto company warranties.
 
“I have no idea,” House Minority Leader John Boehner (R-Ohio) said when asked if the Obama administration could unilaterally implement the auto warranty guarantee. “They just shouldn’t do it at all.”
 
Meanwhile, House Republican Conference Chairman Mike Pence told CNSNews.com that he assumed the administration could.  
 
“They’ve already used TARP money to finance part of the auto bailout. I would expect they would be able to do that again if the resources were there. I wouldn’t want to draw that conclusion,” Pence said.  
 
“I wouldn’t want to confirm previous decisions. I would accept the last administration used TARP funding to finance the auto bailout, and I would regretfully assume the current administration would feel the latitude to do likewise,” he added.