Ailing Auto Industry Focus Of Washington

President Obama is expected to announce plans for restructuring the ailing U.S. auto industry on Monday. It's the latest in the administration's efforts to deal with the economic crisis. The administration is expected to be able to sell the plan to Congress and the American people.

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STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. I'm Steve Inskeep.

RENEE MONTAGNE, host:

And I'm Renee Montagne. President Obama is to announce plans this morning for restructuring the ailing U.S. auto industry. Just yesterday came word that the CEO of General Motors Rick Wagoner would resign, as requested by the White House. This plan for the auto industry is the latest in the Obama administration's efforts to deal with the economic crisis, and joining us now for some analysis is NPR's Cokie Roberts. Good morning.

COKIE ROBERTS: Good morning, Renee.

MONTAGNE: Cokie, this is a pretty dramatic intervention by the administration into operations of the - at least this one auto company. What do you think the congressional reaction will be?

ROBERTS: Well, it's never been popular to shore up the auto companies. In fact, the president himself said on "60 Minutes" the only thing more unpopular than saving the banks is saving the car companies. But there have been a lot of stories lately about the impact of the car companies going bust, the impact on suppliers, workers, all of that. And I think that by getting rid of the CEO Wagoner - and apparently some members of the board are also likely to go - that you have the effect of a rich guy who made some bad decisions is not the person getting the money from the government. So that's likely to be popular.

It's also a short timeframe, so both GM and Chrysler are to try to come up with ways to turn themselves around, for Chrysler to find a partner to merge with. So, I think that, you know, the administration's likely to be able to sell it to Congress and the American people. But the administration, Renee, is warning that there is more to come, that history shows that problems only come if governments flinch in the face of a crisis. The treasury secretary was out on the airwaves yesterday making that case. Here's Timothy Geithner on "Meet the Press" yesterday.

(Soundbite of TV show, "Meet the Press")

Secretary TIMOTHY GEITHNER (Department of Treasury): Again, the classic lesson in financial crisis: If governments wait to act, they wait too late, and that means more damage to the economy, higher deficits in the future, greater cost for the taxpayer. We're not prepared to take that approach.

ROBERTS: He says that's what happened with the Great Depression here, with Japan recently, is the governments didn't do enough. So we stand warned, Renee. More stimulus or bailouts could come.

MONTAGNE: Okay, but Cokie, Congress is debating budget plans that do not currently include more spending for the auto industry or the financial institutions. They made sure of that, that that was not in there. What does that say about what the Obama administration can do here?

ROBERTS: Well, Congress certainly did get spooked by the deficit numbers that came from the Congressional Budget Office, and they started trying all the silly things that Congresses and administrations always try when they hate the numbers. You know, make a, you know, five-year budget instead of a 10 year budget, all of that. But they are still horrified by the numbers, so they have started cutting back on things like the middle-class tax cut. Republicans are trying very hard to intimidate moderate Democrats from swing districts about going with high deficits, and we're going to see if that works, how successful that is.

MONTAGNE: Well, can the Republicans, Cokie, with a straight face, really mount a campaign against red ink, given the Bush administration pushed deficits to record levels?

ROBERTS: Well, apparently, they think they can, and say that, you know, they say we're sorry about those, and moving along now. Look, the point is Democrats are clearly worried about it, both for fiscal reasons and for political reasons. But it's also you know, we're not clear on what the old political mantras - whether they still sell or not. Characterizing the Democrats as the party of big government was a problem for them for years.

But, you know, it's hard to know now, because people might feel that government is a good idea, given what's happened in the markets. Republicans are convinced that going on this attack still works. They're going against new regulation of financial institutions. We'll see, Renee, how all of that sells.

MONTAGNE: Cokie, thanks very much. NPR's Cokie Roberts.

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