Pelosi, Reid Urge White House To Consider Bailout Funds For Carmakers.
The New York Times (11/9, A32, Herszenhorn) reports that House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) "urged the Bush administration on Saturday to consider using the $700 billion bailout for the financial system to aid distressed American automakers, in a prelude to what may become urgent negotiations over additional economic stimulus measures." In a letter to Treasury Secretary Henry M. Paulson Jr., "the Democratic leaders said, 'A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy and the livelihood of the automobile sector's workforce.'" The Times adds the Democratic leaders "also urged Mr. Paulson to include strong taxpayer protections as a condition of any aid to the automakers."
USA Today (11/10, Carty) adds that the "press for a federal bailout of the auto industry increased over the weekend." The Administration "did not directly comment on the request to tap the TARP (Trouble Asset Relief Program)," but "Treasury spokeswoman Jennifer Zuccarelli says, 'We continue to work on a strategy that most effectively deploys the remaining funds to strengthen the financial system and get lending going again.'" USA Today adds that the letter "came a day after [General Motors] (GM) painted a grim picture of its finances -- one that suggests a federal bailout is its only option to stay solvent." President-elect Barack Obama, "standing on stage with Michigan Gov. Jennifer Granholm" on Friday, said that "he favors helping the automakers, naming it his second economic priority."
The Washington Post (11/9, A1, Montgomery) pointed out in a front page story on Sunday that in their letter, Pelosi and Reid note "that Congress granted Paulson broad discretion to use the bailout money to 'restore financial market stability.'" If the request "is granted, it would expand the federal government's role in private enterprise far beyond the financial sector. Critics have warned that a bailout of GM would attract a long line of other companies to Washington to argue that their survival, too, is critical to the economic health of the country."
The Financial Times (11/10, Politi) notes, "If Mr. Paulson does not consent to direct aid to carmakers through the $700 billion bailout plan, Democrats hope the administration will agree to approve new loans to General Motors, Chrysler and Ford during negotiations over a fresh fiscal stimulus later this month." The Times adds that "it is unclear whether direct aid to the car industry will come up in today's meeting at the White House between President George W. Bush and his newly elected successor."
AutoNation Chairman Backs US Aid For Carmakers. The Wall Street Journal (11/8) reported that the chairman "of the nation's largest chain of auto dealers said Thursday he 'absolutely supports' federal aid for U.S. auto makers." Shares of AutoNation, "along with the shares of the big auto-rental companies, have been hit just as hard as those of the auto makers. AutoNation is down 58% for the year, and the rental names have fared worse, which explains CEO Michael Jackson's assertion that it would be a 'travesty' that the auto industry could collapse while Wall Street receives billions of bailout dollars."
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