Yet, despite criticism over the financial bailout, Democrats are pushing forward with their own $25 billion auto industry bailout that offers taxpayers no protection, no oversight, no hearings, no debate and no guarantee that the plan will work.
The proposed bailout will commit $7 billion to offer $25 billion in bailout loans to automakers. Yet, with no plan put forth by automakers on how they will turn around sagging sales and no accountability mechanism in place, there is a large chance that taxpayers will eventually end up writing-off the debt.
On September 10th, Nancy Pelosi, when asked about the bailout stated, ""This is very, very important. It’s an important industry in our country.It’s about jobs. Jobs, jobs, jobs, jobs." But without hearings, debate, any demand of an industry recovery plan and no oversight, this bill is more likely about: Votes, Votes and more votes in Michigan.
Greg Martin, Washington's General Motors Spokesman told reporters in early September, "The best bill to include this in is the bill that has the best chance of getting passed." Unfortunately, Democratic Leadership has followed Mr. Martin's advice. The San Francisco Chronicle reported on Monday that the Stop-Gap Bill that must be passed prior to the end of September to protect the government against a shut-down, now contains the $25 billion auto industry bailout. Democratic Leaders who have been shaping the bill in secret are waiting until the last possible minute to introduce the bill.
The Stop-Gap bill is the result of Congressional Leadership that has failed to pass a budget this year. As a result, the government will begin a shut-down on October 1st, unless a temporary appropriations bill, the Stop-Gap, is passed. In addition, with the late introduction of the bill and use of parliamentary procedure to fast-track the bill, there will be no time for debate. As a result, on October 1st, the Auto Industry will receive a $25 billion bailout without hearings; without executive pay scrutiny; without hearings; without assurances that the money will help; without any plan for recovery by the auto industry; without oversight; without taxpayer protection; and without any media coverage.
By comparison, when the Government agreed to the $1 billion dollar bailout of Chrysler in 1979, the bailout only occurred after deep scrutiny and assurances by Chrysler executives. Lee Iaccoca was forced to commit to a $1 salary as other executives were forced to take deep pay cuts. Chrysler was required to produce a business plan outlining repayment of the loan and recovery of the business. Numerous hearings, extended debate and taxpayer protections were demanded. Yet the Democratic proposal, will face no debate, no taxpayer protection and no demands on executive accountability.
What is even more disconcerting is the fact that this bailout is akin to applying a band-aid to an industry that has had its legs cut-off. General Motors in July posted the largest loss in US corporate history, in a large part to sales that have dried up due to high fuel prices. Congress after coming to power 2 years ago under a promise of lower oil prices, has utterly failed as the cost of oil has double under their watch. Without legislation aimed at increasing oil supplies and bringing down retail costs no amount of money thrown at the auto industry will solve their corporate crisis and any money thrown at the industry will be a losing proposition for the taxpayer footing the bill.
$25 Billion for the auto industry pales in comparison to the proposed $700 billion plan under debate. But regardless of the size differential, the auto industry bailout is an exercise in Congresses dereliction of duty and hypocrisy. I am by no means saying that a bailout is not needed, but to hand out money to any industry without accountability, without hearings, and without disclosure is wrong. Moreover, to sneak this bailout into last minute legislation that must be passed is disgusting and only proves that our current Congressional Leadership is only interested in votes and their own political power.
We are told that we should calmly approach the Financial bailout; examine and scrutinize the provisions; provide for taxpayer assurances and protection and demand executive compensation reform. Yet, why is it that Democratic Leadership has formed a $25 billion Auto Industry bailout in secret; attached it to a bill that is nearly guaranteed to pass; expedited the bill to pass within a week without debate; without accountability, assurances or taxpayer protection; without a demand for executive compensation reform?
Why? Because this bailout must occur before election day, so that Democrats, primarily Senator Obama, can tell the voters of Michigan that they want to protect their jobs. In reality, however, Congress has done nothing to demand a recovery plan by the auto industry and has passed no legislation aimed at addressing the underlying energy causes of the industry's failure. This is legislation aimed at buying votes and misleading the voters of Michigan. For 2 decades, Democrats have flocked to Michigan, promised them economic renewal and have failed to deliver. If the voters of Michigan want change, then perhaps they should place their faith in others hands. If the voters of this nation want change, then perhaps they should start with every member of congress, from both parties, that have failed to even pass a budget; and who will politicize Financial bailout legislation while secretly funneling $25 billion in undebated and unaccountanted bailouts to obtain votes.
J Brown
September 24th, 2008
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