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Bush, Hill leaders: Job losses argue for auto help
posted 12/05/08 2:04 pm
ABC 7 News - Bush, Hill leaders: Job losses argue for auto help
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Washington - President George W. Bush (web | news | bio) and congressional leaders seized on the latest grim unemployment data Friday to try to fire up lukewarm support on Capitol Hill for bailing out U.S. automakers. But they clashed anew over terms of the rescue plan and the source of any aid. As the Big Three auto chiefs pressed their case for $34 billion in a second day of hearings, Bush said in the Rose Garden that the loss of 533,000 jobs in November was even more reason to help the companies.

"I am concerned about the viability of the automobile companies" along with workers and their families, Bush said. "And likewise, I am concerned about taxpayer money being provided to these companies that may not survive."

He said Congress should act by no later than next week - and make sure that public dollars are repaid.

With just a month and a half left in his presidency, Bush repeated his calls for Congress to rewrite an existing $25 billion program intended to help the industry make more fuel-efficient vehicles.

Democratic leaders and environmentalists oppose changing that program. Instead, they favor other routes, including taking the money directly from a $700 billion financial bailout fund run by the Treasury Department. Congressional budget analysts have said raiding the fuel-efficiency program for a broader auto bailout would net only $10 billion to $15 billion in short-term cash.

The administration insists on reserving money in the Wall Street bailout for banks and other financial institutions.

While lawmakers pondered a range of options, including a government-run management board, no individual plan seemed to be gaining much footing.

Senate Majority Leader Harry Reid, D-Nev., said the Labor Department's report of the steepest monthly job loss in 34 years makes the auto bailout imperative.

"We must ... prevent the auto companies from collapsing, or we risk adding millions of more Americans to the unemployment line," Reid said. He said "any help must include specific requirements that ensure viability and strong oversight" of the industry.

Auto executives pressed their request for an immediate infusion of up to $34 billion, saying they need the dollars to survive. The request came two weeks after they were sent home empty-handed and told to come back with more detailed plans of how they would spend the money and restructure their companies.

"We believe this is the least costly alternative," Chrysler LLC chief executive Bob Nardelli told the House Financial Services Committee.

The committee chairman, Rep. Barney Frank, D-Mass., cited the jobs report showing the 11th consecutive month of losses as all the more reason for Congress to act to help Detroit.

"For us to do nothing, to allow bankruptcies and failures in one, two or three of these companies in the midst of the worst credit crisis and the worst unemployment situation that we've had in 70 years would be a disaster," Frank said.

Congressional leaders have urged the administration to do more to help the industry with money it already has access to - and thus avoid the need for legislation in a quickly expiring lame-duck Congress. Key lawmakers have also called on the Federal Reserve to give the auto companies the kind of direct low-cost loans the central bank has been awarding to financial firms.

Outside the Capitol, auto suppliers representing 50 states and wearing blue hockey jerseys emblazoned with the number of supplier jobs in their states gathered.

"This is not a bailout. This is a loan that will help us recover for the future," said Jim Seta, 37, who works at a plant in Gainesville, Ga., owned by supplier SKF. The plant employs 320 and makes bearing parts for transmissions used in General Motors vehicles.

The chief executives from General Motors Corp. Ford Motor Co. and Chrysler LLC had testified for nearly six hours Thursday before the Senate Banking, Housing and Urban Affairs Committee, asked to expand an already unpopular $25 billion request to $34 billion.

"I don't want to send you home again because it's going to get more expensive," joked Rep. Gary Ackerman, D-N.Y.

Several lawmakers pressed automakers to consider a pre-negotiated bankruptcy, which the companies have shunned. Meanwhile, other members of Congress and the Big Three were contemplating a government-run restructuring that would yield similar results, including massive downsizing and labor givebacks.

While Bush stuck to his insistence that the fuel-efficiency fund be utilized, President-elect Barack Obama (web | news | bio) was not stepping forward with an alternative.

Frank said Obama is "going to have to be more assertive than he's been."

---

Associated Press writer Ken Thomas contributed to this report.

Written By JULIE HIRSCHFELD DAVIS

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