Monday, December 08, 2008

Bush Stands Ground Over Detroit Aid.

Bush Stands Ground Over Detroit Aid.

The Wall Street Journal (12/8, A16, Hitt) reports, "In the standoff between the lame-duck Republican president and an ascendant Democratic speaker of the House, an odd thing happened: The president won." The Journal adds that "the Detroit rescue package being negotiated by congressional leaders is coming together in defiance of the prevailing political winds, representing a rare concession by House Speaker Nancy Pelosi." President Bush "stood his ground, demanding that any rescue of the Detroit automakers be financed by $25 billion in already-approved loans intended to help the industry meet higher fuel-economy standards." The President "essentially won that argument Friday, when Rep. Pelosi, who had wanted to tap the $700 billion pool created to calm financial markets, backed down."

The Washington Post (12/8, A1, Montgomery) notes in a front-page article that "the Bush administration is calling for a car czar within the Commerce Department who would be empowered to force the automakers to restructure or force them into bankruptcy." Democrats "want to give the companies the money first, permitting them to survive through the end of March, and name an administrator later."

The Politico (12/8, Rogers) reports, "An estimated $15 billion emergency loan package for the auto industry -- now taking shape in Congress -- leaves open the door for the incoming Obama administration to add more money if needed this winter by tapping into the Treasury's financial rescue package." While Bush "has refused to make available the same Treasury funds, the White House has signaled tacit support of the legislative provision as part of the bargaining aimed at winning House and Senate passage this week."

Senator: Deal On GM, Chrysler Rescue Loans Could Be Unveiled Soon. The Detroit Free Press (12/7, Hyde, Snavely) reported, "A compromise pact to provide at least $15 billion in loans to General Motors Corp. and Chrysler LLC could be unveiled within the next 24 hours, Michigan Sen. Carl Levin (D-MI) said Sunday." Levin said on Fox News, "I think they're very close to a deal, I'm very confident there will be a deal, and that will happen within 24 hours." Levin also "said he expected the bill to be introduced in the next couple of days. The Senate is set to come back in session Monday, with the House planning to return Tuesday."

Reporting on the expected deal, AFP (12/8, Sheridan) adds, "Democrats said a deal was imminent after a weekend of negotiations with the White House on a short-term loan package of about 15 billion dollars, but Republicans warned that a tough debate awaited the proposed bill this week." GOP Sen. Richard Shelby (AL) said on Fox News, "This is a bridge loan to nowhere." He "added he hoped for an 'extended debate' on the bill but declined to say whether Republicans would try to block it with a filibuster."

Obama: Detroit's Big Three Lack "Sustainable Business Model." The Financial Times (12/8, Dombey) reports that Obama "said...his administration would seek to restructure the vehicle industry by simulating the effects of Chapter 11 bankruptcy protection while providing government aid to keep it functioning." The President-elect went on to say the companies "did not have 'a sustainable business model right now.'" The Times adds, "The president-elect's comments are particularly significant because the emerging compromise, on which Congress is likely to vote this week, would in effect defer a long-term decision on the industry until the Obama administration and a new Congress are in place." Obama also said yesterday, "We are going to have to figure out ways to put the pressure on -- the way a bankruptcy court would demand accountability, demand serious changes -- but do so in a way that allows them to keep factory doors open."

Mentioning the lack a sustainable business model, the New York Times (12/8, A1, Herszenhorn, Calmes) adds on its front page, "President-elect Barack Obama, whose transition team has been involved in the talks, made starkly clear in an interview and at a brief news conference on Sunday that any aid to the Big Three auto companies should not come without significant concessions." The Politico (12/8, Martin) also reports on Obama's comments.