Congress Gives Automakers Homework

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Lawmakers are demanding that GM, Ford and Chrysler submit a plan for improvements before Congress will consider a $25 billion aid package for the auto industry. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid say if there's a viable plan, Congress might return to work early next month for a vote. Some lawmakers wanted Congress to stay in session.


Congress did not give car makers the bailout that they pleaded for in Washington this week. Instead, lawmakers asked the car makers to do some work. They demanded a plan for long-term survival before they will consider any more financial help. In other words, show us the plan, and we may show you the money. NPR's David Welna has the story.

DAVID WELNA: All this week's lame-duck session of Congress really got done was a $6 billion expansion of unemployment benefits. Senate Majority Leader Harry Reid pulled the plug on voting for a much-debated $25 billion auto-industry bailout. Instead, Reid gave auto-industry executives until December 2nd to present plans to Congress showing just how the auto industry intends to survive.

(Soundbite of speech, November 20, 2008)

Senator HARRY REID (Democrat, Nevada; Senate Majority Leader): We're prepared to come back in to session the week of December 8th to help the auto industry, but only if they present a viable plan that gives us , the Congress, the confidence that taxpayers and autoworkers will be well-served.

WELNA: And confidence, Reid said, was not exactly what the big-three auto-industry executives who testified before Congress had inspired.

Sen. REID: What happened here in Washington this week has not been good for the auto industry. I know it wasn't planned, but these guys flying in their big corporate jets doesn't send a good message to people in Searchlight, Nevada, or Las Vegas or Reno or any place in this country.

WELNA: Added to that public-relations fiasco is another problem pointed out by House Financial Services Chairman Barney Frank. It's widespread dissatisfaction with the $700 billion financial-services bailout, which Frank himself helped push through Congress.

(Soundbite of speech, November 20, 2008)

Representative BARNEY FRANK (Democrat, Massachusetts; Chairman, House Financial Services Committee): So, to avoid the problems that we now face and to deal with the skepticism, the deep skepticism, about doing these things, it is essential that we take the time to make sure that we have anticipated the kind of problem that many people think arose because we gave too much discretion the last time.

WELNA: But by kicking the car-industry bailout can down the road another couple of weeks, Democrats are taking the political risk of angering organized labor, one of their most important constituencies. House Speaker Nancy Pelosi insisted that she really is acting in the best interest of car makers and autoworkers.

(Soundbite of speech, November 20, 2008)

Representative NANCY PELOSI (Democrat, California; Speaker of the House): We're trying to have a viable auto industry. We recognize how important that industry is to our financial community as well as to our military and our national security. So, we're there to have it be viable. It is not on the road to viability now.

WELNA: That was no consolation, though, to Ohio Republican Senator George Voinovich. He wanted the Congress to stay in session to approve a rescue for the big three.

(Soundbite of speech, November 20, 2008)

Senator GEORGE VOINOVICH (Republican, Ohio): If we don't get this done and they do go under, I believe that we're going to have a deep recession, and quite frankly, from what I can pick up, we may just go over the cliff.

WELNA: Voinovich was part of a bipartisan group of senators from car-making states who crafted the bailout plan, redirecting $25 billion that Congress has already approved to help car makers retool to become more fuel efficient. Michigan Democrat Carl Levin prefers that plan, because it would only require car makers to reveal their survival strategies when applying for federal loans.

(Soundbite of speech)

Senator CARL LEVIN (Democrat, Michigan): What the auto industry is going to need to do, because of the decision of the leaders here, is instead of presenting that plan after enactment - if we could have gotten this passed - to the secretary of Commerce with their application, they're going to need to present that two weeks from now, approximately, to the Congress and to the committees.

WELNA: And the clock is now ticking. David Welna, NPR News, the Capitol.

(Soundbite of music)

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Congress Stalls Automakers' Bid For Relief

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The grand finale was no finale at all Thursday on Capitol Hill, as Congress delayed voting on a $25 billion bailout for the auto industry. Lawmakers said they could reconsider it in December, but only if the auto industry first comes up with a viable plan for restructuring its business.

There was an eleventh-hour push by a bipartisan group of senators from states with prominent auto companies to come up with a bailout for Detroit's Big Three — Ford, Chrysler and GM. Sen. Carl Levin (D-MI) said the proposal would tap $25 billion already approved by Congress for retooling the industry to make more fuel-efficient cars.

According to Levin, carmakers would apply to the Commerce Department for bridge loans from that fund and repay the money so it could eventually be used as it was originally intended.

"We believe that there's a reasonable chance that if this were put to a vote today or tomorrow, that it could get the 60 votes necessary," Levin said

A spokesperson for the White House said that "while we need to review the language, this is an agreement the president could support. We encourage the Congress to pass it as soon as possible."

But Senate Majority Leader Harry Reid nixed any such vote.

"They have a bipartisan agreement, but it's their agreement," he said. "Unfortunately, the sad reality is that no one has come up with a plan that can pass the House and the Senate and get signed by President Bush."

Reid said that while there is opposition among Democrats to approving more loans, they also don't want to see the auto industry collapse.

"We have decided the best way to proceed is to give the auto companies another opportunity to make their case ... to Congress and to the American people," he said.

The majority leader said that lawmakers are requesting that the automakers submit a business plan by Dec. 2 to Rep. Barney Frank (D-NY) and Sen. Chris Dodd (D-CT), chairmen of the House Financial Services and Senate Banking committees, respectively.

"These two very able men will review the plan and, if necessary, hold hearings during the week of Dec. 2 to fully vet the auto industry's proposal," Reid said.

Should the plans presented to the heads of the banking committees pass muster, Reid said he would then call Congress back in session the week of Dec. 8 to consider making money available to the auto industry. But House Speaker Nancy Pelosi also made clear the automakers would have to deliver a convincing plan for survival.

"It is all about accountability and about viability," she said. "Until we can see a plan where the auto industry is held accountable, and a plan for viability on how they go into the future — until we see the plan, until they show us the plan, we cannot show them the money."

Sen. George Voinovich (R-OH), who wanted a vote Thursday on the bipartisan compromise plan, belittled the Democratic leaders' new proposal as unrealistic.

"How do you ask somebody to present a plan of viability when you haven't laid out for them what that plan should be?" he said.

Another backer of the bipartisan proposal, Sen. Kit Bond (R-MO), mentioned one item he thought automakers should propose.

"There are a lot of steps the auto industry is going to have to take," Bond said. "Selling corporate jets might be one, just as a suggestion."

Bond's reference was to anger caused by the Big Three carmakers' CEOs having flown to Washington on corporate jets to plead for help.

Rep. Frank also warned that taxpayers are also angry with Congress for thoughtlessly doling out money: "If we were to pass this right away, I could write the story for tomorrow: In a rushed, barely examined commitment of many, many more taxpayer dollars, Congress today leapt into an abyss."



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