White House Rebuffs Criticism of Its Auto-Aid Plan

November 17, 2008 - 11:07 AM
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Washington (AP) - With Congress returning Monday to deal with an auto industry in dire financial straits, the Bush White House stressed that it supports help, but not at the expense of the $700 billion Wall Street rescue program.
 
With the Senate ready to start work on assistance to the industry, press secretary Dana Perino issued a statement saying the administration "does not want U.S. automakers to fail." She complained that reporting on the White House's statements on this issue has involved "attempts to shorthand the administration's position."
 
Perino's early morning statement also made clear, however, that the administration steadfastly opposes drawing funds from the bailout plan to help Detroit. She said the $25 billion that Democrats favor taking from the rescue plan should come, instead, from a Department of Energy program previously approved and funded to develop fuel-efficient vehicles. The White House opposes the idea of automakers getting an additional $25 billion.
 
Democrats want to use part of the $700 billion Wall Street bailout for emergency loans to help prop up the Big Three carmakers. General Motors Corp., Ford Motor Co. and Chrysler LLC are seeking an infusion of $25 billion, a figure that several Senate Democrats embraced Sunday.
 
Senate Democrats plan to introduce legislation Monday attaching an auto bailout to a House-passed bill extending unemployment benefits. A vote was expected as early as Wednesday.
 
"There's a high degree of urgency" for federal action if GM is going to stave off a financial crisis, Rick Wagoner, GM chairman and chief executive, said Sunday in a joint appearance with United Auto Workers President Ron Gettelfinger on WDIV-TV in Detroit.
 
"It's really time to move on this," Wagoner said.
 
In her statement Monday, Perino said, "The auto industry is an important part of our manufacturing base, and we want the industry to succeed and compete in the global economy." But she also said that media reports have erroneously depicted the administration as taking too harsh a stand on financial relief.
 
Her statement Monday seemed aimed more at elaborating on the administration's position than revising or tweaking it.
 
"We believe this assistance should come from the program created by Congress that was specifically designed to assist the automakers -- from the $25 billion Department of Energy loan program," Perino said.
 
She said the $700 billion rescue program "was never intended by Congress to assist automakers or other sectors of the economy. It was solely intended to deal with what is an ongoing credit crisis in our financial sector." Perino also said that any new legislative effort to help the big carmakers should require that those manufacturers are viable companies, ones willing to restructure themselves for the long term.
 
President-elect Barack Obama said he believes aid for the auto industry is needed but that it should be provided as part of a long-term plan -- not simply as a blank check.
 
"For the auto industry to completely collapse would be a disaster in this kind of environment," Obama said in a "60 Minutes" interview aired Sunday night on CBS. "So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all of the stakeholders coming together with a plan -- what does a sustainable U.S. auto industry look like?"
 
House Speaker Nancy Pelosi, D-Calif., has embraced an auto bailout, though she hasn't set a price tag. But passage is less certain in the Senate, where majority Democrats will need at least a dozen GOP votes to prevent opponents from blocking their measure.
 
On Sunday top Republican senators said using any of the Wall Street bailout money to help carmakers would be a mistake. Sen. Richard Shelby of Alabama called the U.S. auto industry a "dinosaur" whose demise would simply be stalled by a bailout.
 
"I don't believe the $25 billion they're talking about will make them survive," said Shelby, the senior Republican on the Senate Banking, Housing and Urban Affairs Committee. "It's just postponing the inevitable."
 
Shelby spoke on NBC's "Meet the Press."
 
Congressional Democrats have some internal power struggles to settle this week.
 
The House's longest-serving member, 82-year-old John Dingell of Michigan, is fighting to keep the chairmanship of the powerful Energy and Commerce Committee. And in the Senate, Democrats will have their own showdown Tuesday when they decide whether to strip independent Sen. Joe Lieberman of Connecticut of his chairmanship of the Homeland Security and Governmental Affairs Committee.