(CNSNews.com) - The $14-billion auto bailout legislation rejected by the Senate Thursday night should have included greater sacrifices from the United Auto Workers union and company bondholders, Sen. Bob Corker (R-Tenn.) told CNSNews.com on Thursday.
Corker, a member of the Senate Banking, Housing and Urban Affairs Committee, added an amendment to the auto-bailout bill, but it wasn't enough to save it.
Although the House passed the bill 237-170 on Wednesday, the Senate defeated it 52-35 Thursday night.
Democrats, however, told CNSNews.com that the UAW already has made enough concessions and that it is not the role of the government to tell private industry how much they must compensate their employees.
His amendment was “an elegant, simple solution,” Corker told CNSNews.com. “When anyone borrows money there are covenants in the loan. In this case I am asking for a few simple covenants. It’s so simple.”
According to a draft of Corker’s plan obtained by CNSNews.com, the amendment would require auto companies that accept government loans to reduce their labor costs to a level equal to the salaries paid by non-unionized foreign auto companies operating on U.S. soil, such as Nissan, Toyota and Honda.
The amendment also would give existing bondholders just 30 cents on the dollar to help reduce the companies’ overall debt load; force the UAW to accept stock for much of the debt owed them by the manufacturer; and end payments to workers who are still receiving nearly full compensation years after they were laid off.
Corker’s plan has been endorsed by many Senate Republicans, including Sen. Minority Leader Mitch McConnell (R-Ky.). He told CNSNews.com that unless the UAW and stockholders make these concessions, the automakers have no chance of competing successfully in a global market and paying the loans back.
“Senator Corker has proposed an amendment that would go a long way toward improving this bill,” McConnell said in comments on the Senate floor before Thursday's vote. He said the Corker Amendment doesn’t just encourage reform, it requires it.
“The Corker Amendment forces necessary reforms, holds companies accountable, and assures taxpayers that these companies won’t be back for more.”
But Sen. Claire McCaskill (D-Mo.) told CNSNews.com that the UAW already has cut back enough.
“I don’t think they need to make more concessions,” said McCaskill. “I think they have made plenty of concessions. I think there is a terrible double standard going on between the workers in the financial sector and the workers in the manufacturing sector.”
Sen. Kent Conrad (D-N.D.) told CNSNews.com he does not believe it is the government’s role to tell companies what they must pay their employees.
“We can’t have Congress setting wage rates by statute,” said Conrad. “Think about the implications. When you get down to the question of Congress deciding what the wage rate or compensation should be, you have a problem. I don’t think that’s a direction in which Congress wants to go. I don’t think that’s going to work.”
Conrad said he does not have a problem with a requirement currently in the bill that bars the top 25 paid employees in each company from receiving incentives or bonuses, because that only affects the “upper echelons.”