Congress Eyes Auto Bailout
MELISSA BLOCK, host:
This is All Things Considered from NPR News. I'm Melissa Block.
ROBERT SIEGEL, host:
And I'm Robert Siegel. Lawmakers are expected back in Washington next week for a lame-duck session, and top Democrats say a priority will be keeping the big three automakers from going under. House Speaker Nancy Pelosi wants, what she calls, limited and emergency assistance for the auto companies. She's looking for such money to come from the $700 billion bailout fund. But that is not what Treasury Secretary Henry Paulson wants to do. Here's NPR's David Welna.
DAVID WELNA: House Speaker Nancy Pelosi handed the task of drafting a financial rescue package for the American auto industry to the same man who led the battle for the big banking bailout. House Financial Services Committee Chairman Barney Frank got right to work on his new assignment, which he said he did not beg for.
Representative BARNEY FRANK (Democrat, Massachusetts; Chairman, House Financial Services Committee): We will be having a hearing a week from today on a bill that will be drafted to advance 25 billion in loans to American auto companies, and it will be written in a way that we will be as protected as it is possible to be, the taxpayer.
WELNA: Those $25 billion in loans, Frank said, should come from the so-called Troubled Assets Relief Program, or TARP, which is better known as the $700 billion bailout. But Frank also said he wanted specific authorization from Congress to tap those funds.
Representative FRANK: It would be a mistake, it would just be wrong to take it out of the TARP without a separate vote authorizing that. You know, the quick and easy way to do it was just let them do that out of the TARP. And I think that would have had people legitimately saying, that's not what you told me it was for, and you can't do that. And they were right.
Secretary HENRY PAULSON (Treasury Department): The intent of the TARP was to deal with the financial industry.
WELNA: That was Treasury Secretary Henry Paulson earlier today. He made clear he was not a big fan of tapping the TARP to help out the troubled auto industry, even though he acknowledged its vital role in the economy.
Secretary PAULSON: When you look at autos and you look at that whole food chain and what it means to manufacturing, it's critical. And I've said very clearly - and I think the administration said that, you know, we need a solution, but the solution has got to be one that leads to viability.
WELNA: And it wasn't just Paulson throwing doubt on the viability of Detroit's carmakers. Pennsylvania House Democrat Paul Kanjorski said if Detroit wants a bailout, it's going to have to start making the kind of fuel-efficient cars that consumers want to buy.
Representative PAUL KANJORSKI (Democrat, Pennsylvania): We have to make sure we're just not throwing it down a rat hole, that we're going to have a competitive world industry coming out of it.
WELNA: House Republicans were quick to point out that Congress recently approved another $25 billion worth of loans for the auto industry. That money is meant to help carmakers re-tool for greater fuel efficiency, but very little of it has actually been dispersed. Alabama Republican Spencer Bachus warned today that Congress may soon face requests from many other industries for bailouts.
Representative SPENCER BACHUS (Republican, Alabama): And I'm afraid if we don't answer the question very soon, when does this stop? That it's going to stop when we run out of money.
WELNA: Here's how Financial Services Chairman Frank answered Bachus' question of when does it stop.
Representative FRANK: It'll stop when you get into a more normal situation, when we have diminished the recession, when we are not in a situation where the whole economy is so vulnerable.
WELNA: The situation is so dire, Frank said, that lawmakers can't wait for a new Congress and a new president. David Welna, NPR News, the Capitol.
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