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Government “Bailout” Of U.S. Automakers Looks Like A Done Deal

Back on September 4, I wrote a post on how Congress might consider approving a multi-billion dollar loan package for U.S. automakers. Earlier today, Andrew Taylor of the Associated Press talked about the same issue. He wrote:

Among the few bills likely to actually become law before Congress closes shop for the elections is a plan to give struggling U.S. automakers $25 billion in federal loans.

Opponents criticize it as a taxpayer-funded industry bailout, but the legislation is steaming ahead anyway, buoyed by the support of both John McCain and Barack Obama.

It’s no coincidence that the legislation would help manufacturing states like Michigan and Ohio, whose voters could very well determine the outcome of the presidential election.

The loans would be used to help General Motors Corp., Ford Motor Co., and Chrysler LLC retool their factories to produce cleaner, more fuel-efficient vehicles as required under an energy bill passed last year…

As Taylor mentioned, there are those who point out that the proposed loan package is just another government bailout. He wrote:

Consumer and environmental groups, along with conservative GOP lawmakers, have called the loan program a bailout and argued the industry should not be rewarded for failing to produce enough fuel-efficient vehicles instead of gas-guzzling trucks and sport utility vehicles.

But such voices are being drowned out by defenders of the troubled auto industry, which, despite suffering massive losses recently, remains one of the backbones of the economy…

In fact, Taylor noted that opponents of the proposed loans “realize they’re going to get steamrolled.” As Senator Judd Gregg (R-N.H.) was quoted to say by the AP reporter:

Politics wins over policy every time around here in a presidential year.

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Source:

“Backing of Obama, McCain buoy automaker loan plan”
Andrew Taylor
Associated Press, September 16, 2008