Obama Commends Bush For Auto Bailout

In a statement sent out just now from his communications shop, President-elect Barack Obama announced his agreement with the Bush administration's decision to lend a $17.4 billion loan to troubled automakers.

"Today's actions are a necessary step to help avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers," the statement reads. "With the short-term assistance provided by this package, the auto companies must bring all their stakeholders together -- including labor, dealers, creditors and suppliers -- to make the hard choices necessary to achieve long-term viability. The auto companies must not squander this chance to reform bad management practices and begin the long-term restructuring that is absolutely required to save this critical industry and the millions of American jobs that depend on it," said Obama.

No real surprise here: Obama and Bush -- along with most congressional Democrats -- have stated their support for helping out the automobile industry before. But with the Bush administration ultimately deciding to use TARP funds for the distressed companies and Obama supporting the move, odd political fault lines have been firmly drawn. Obviously, the outgoing and incoming presidents are of different ideological ilk. But both saw compelling reason to bail out domestic auto manufacturers. It was Senate Republicans, in particular those from the South, who have positioned themselves as the alternative voice: the anti-bailout caucus.

A question for readers: what will be the political fallout from this be?

The bailout plan would, according to the Associated Press, make $13.4 billion available this month and January. Of that, $9.4 billion will go to General Motors Corp. and $4 billion to Chrysler LLC. Ford Motor Co., the other member of the Big Three, has said it does not need immediate help. Tucked in the provision are a host of reforms and concessions from both the companies and the United Auto Workers.

Comments

[JenMI]

Guess what folks..as much as I would like to see economic, gas alternative vehicles, it was my 11 year old, gas guzzling, 4 wheel drive, SUV that got me, my daughter and several co-workers to our jobs this weekend in snowbound MI...an absolute must the last retail weekend before Christmas!

[Badger84]

I'm not holding my breath for US auto makers to voluntarily change the way they do business as part of a bailout. I tried to watch a college football game today and Dodge inundated the airways with commercials for the gas-guzzling RAM, with all that extra horsepower for the deficient male demographic.

[Frenbar]

The two corporate parties never disagree on corporate welfare.

[Stud99]

Doesn't look like the Obama administration is going to be very changey from the Bush administration.

[RRG64]

Please. As long as the Obama adminstration does just ONE thing positive for the US people, it will be 100% improvement. Bush and gang have wrecked this country for decades. Anyone who cant see this is just an idiot,. pure and simple.

[Kerin]

That Bush has the entire bail-out theory incorrect isn't suprising. What 's surprising is Obama is going against his own economic philosphy--"from the bottom up" and not the failed "trickle-down" idealogy .

But as a small business owner without the political clout to lobby for a bail-out, I have the solution for our economic recovery: Refund 30% of every taxpayers' federal withholding taxes for 2008. We have the system already set up (the IRS); no need for an additional level of government, no oversite is needed and the refunded money will have an immediate effect on the entire country.

People will have the funds for a down-payment for a new house or car, it will help many refinance their homes since they will have cash to off-set negative equity they have in their homes, people will save, which will give banks cash to loan, people will buy stocks since many good companies are undervalued, which will help boost their retirements since these stocks will go up when the recovery hits, and people will spend.

Further, it will soften the anger among taxpayers who feel the bail-out is simply enriching CEO's and rewarding bad business decisions.

Even local and state governments will benfit since in most areas, a federal refund is taxable at the state level.

This is a win-win proposal, but doesn't stand a chance of ever happening. Please Obama, stay true to your own economic policy--"From the bottom up."

[harriscrl3]

Well at least the Grinch didnt steal Christmas for some of these auto workers. Although I hope he does for these folks.

http://www.youtube.com/watch?v=qDC0qcf0kzE

[lisakaz2]

Or what fallout to the rethuugees who put union breaking above national interest?

[Stormy 77]

Ridiculous! Now I know both the outgoing and incoming presidents are irresponsible with money and don't care about people who ARE responsible with money. When will we get someone elected who will spend taxpayer money as if it was their own money???? If this was their OWN personal money, the bailout wouldn't have done. It's a different story with our taxpayer money since it's only us and future generations of taxpayers who will be paying for this loss.

The auto is doomed to bankruptcy because they can't make enough profit to cover the soaring costs of their bloated UAW workers. Workers who get paid close to $80/hour - compared to average American labor rate of $28/hr and foreign carmakers employees who are at around $40 something/hour. UAW isn't going to cut down to the $40something an hour that the companies need to stay alive and viable.

In the meantime I and the masses of other hardworking Americans who are not earing $80/hour like those workers) are being asked to foot the bill to pay for the UAW lifestyle and guaranteed health benefits for life even after retirement. When the companies eventually fail, and if I or other Americans lose our jobs, which OTHER taxpayers are going to bail us out and give us $80/hour + lifetime medical???? Why should they get this when the rest of us have to starve/pay higher taxes to fund their retirement? Where is the equity in that???

[ESK]

First of all you need to get your facts straight. They're right out of the MSM. The auto workers are not making $80/an hr. or anywhere close. That $80 figure, and it's more like in the $70s, includes the burden of costs from earlier contracts, a great deal of which is healthcare related. Do you propose to only ascribe responsability to the workers, or do you think that the auto manufacturers had a little to do with the negotiations that led to those earlier contracts? The auto workers have made concessions and will need to make more, and appear willing to. At the same time the auto industry will need to reorganize, retool and most likely downsize in order to reach a point of health that could be a foundation for future growth. If you leave the industry die it would be a disaster for the conomy as a whole. Also, of course one of the things that would also help is reducing the cost of healthcare in order to increase our competiveness. What are your solutions? All that I saw was complaints in your post.

[XLintLuvR]

Spoken like a true, low information Republican. Is there any lie that they tell that won't get regurgitated? Do you realize that $80/hr translates to over 150k a year? How many auto workers do you know that make that? First of all their hourly wage is in line with the non union workers from the foreign auto makers. In fact, its about $27 (US) to $28 (Foreign). Get your facts straight first. Once you realize that, all of your other arguments fall apart. Whoever convinced you that the UAW makes $80/hour (actually the number used was $70/hour) or that the foreign companies made $40/hour took advantage of both your ignorance and your ability to continue a myth that's been disproven. They're just concerned with busting unions so that they can further divide the people because overwhelmingly, unions tend to organize and vote democratically. Btw, if you though the Republicans lost a lot of seats this year, wait until 2010 if they can be blamed for destroying the US auto industry, immediately throwing 3 million people into unemployment no matter which company perishes first and ultimately taking down the rest with them, not just the US companies because the foreign ones use the same suppliers and parts manufacturers. Then again, Republicans are never able to think big pictures. That's why as a party they're destined to always be behind the times.

[Geranium]

"Republicans are never able to think big pictures."

LOL - You NON-thinkers voted for Obama. - talk about not being able to see the big pictures!

[Icantbelieveher]

Are the senators going to give up their retirement or lifetime medical benefits for their retirees? How about a pay cut? I didn't think so, but republicans have no problem asking an autoworker to give up their salaries and retirement. They make a decent living wage and republicans are not having any of that. They want them on par with their southern autoworkers, who live with substandard education an dare at the bottom of the list for education, obesity, health, and health care! Not something I'm going to accept, but if you want to keep voting against your self interest, be my guest and waste your vote!

$28/hour is not overpayment. Why, at a time when stimulus is needed and money needs to be put into the hands of the population, are republicans trying to take it out of these people's hands! To pay the unemployment benefits for all the people who will lose their jobs would cost 10 times what it will cost to bail them out. In normal times, they would have been able to get loans, but BANKS AREN'T LENDING!

[darleneslee]

Fact check that $80 per hour for the workers. The average salary for workers is 14-25 per hour.
The truth is that the $70 per hour wage is a lie. That figure comes from what GM pays for their total
cost per workers that includes retirees and health care. That means that if you are working I could
take your salary per hour add in what I am paying my retirees and their health care and wow that's
the answer. So why should current workers be charged with retirees cost ?

[JackND]

How many of these GOP Senators who are now part of the "anti-bailout" caucus voted to bail out the airline industry after September 11?

[lisakaz2]

Good question. Or voted to let Paulson have billions to give to Wall St w/o questions asked?

[KingBatguano]

There's a little book store down the block in my neighborhood going out of business. Where do THEY go to get a Bail Out ? Where do citizens being by the Banks go ?

[Liberal2]

Steam grates, under bridges, soup lines. Just like the 1930s.

[djsi]

Ford will survive this they have a much broader international market than GM or Chrysler but i don't see how GM or Chrysler can dig themselves out they will probably be bought/merged or whatever works.

[kolorkin]

I applaud President Bush on his swift action. Thank you and of course, to Mr Obama, his team and rest of the congressional Democrats who supported the assistant.

[Carolab]

This auto bailout was all about saving Wall Street and the bond market

http://emac.blogs.foxbusiness.com/2008/12/19/auto-bailout-saves-wall-street-too/

[hortonhearsawho2]

Thanks for doing what O told you to do george..now leave.

[howdidoodi]

good call

[Amennyc]

and on the side of Rick Warren.