BUSINESS
10/22/2012 11:29 pm ET Updated Oct 23, 2012

Mitt Romney, Barack Obama Spar Over Republican's Auto Bailout Stance

Mitt Romney and President Barack Obama sparred during the debate over whether Romney said in 2008 that General Motors and Chrysler should fend for themselves without government help.

Obama brought up the subject by saying: "If we had taken your advice, Gov. Romney, about our auto industry, we'd be buying cars from China instead of selling cars to China."

Romney fought back: "I said they need -- these companies need to go through a managed bankruptcy, and in that process they can get government help and government guarantees, but they need to go through bankruptcy to get rid of excess cost and the debt burden that they'd built up."

"You keep trying to ... airbrush history here," Obama responded. "You were very clear that you would not provide government assistance to the U.S. auto companies even if they went through bankruptcy. You said that they could get it in the private marketplace. That wasn’t true."

Romney did oppose a government bailout of the U.S. auto companies in a 2008 New York Times op-ed, "Let Detroit Go Bankrupt." At the end of the op-ed, he noted: "The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk."

But post-bankruptcy financing is not the same as financing during the bankruptcy process, when these companies were still vulnerable and needed outside money to keep functioning. And in late 2008, lending had frozen. As The Huffington Post's Dave Jamieson noted last week:

Those companies did, in fact, eventually go through managed bankruptcy, as Romney noted. But back in 2008, Romney had argued against federal aid for the automakers. Given how difficult it was to borrow money during the financial crisis, it's doubtful that the GM and Chrysler would have made it through the managed bankruptcy process without the intervention of the federal government.

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