Car czar to oversee bailout of the Big Three
Negotiators in Washington are working into Monday night, in an effort to hammer out the details of a plan that would give the Detroit automakers some $15 billion to tide them over until better economic times. It appears that in spite of the opposition to any bailout plan for the three automakers, Congress and the White House seem determined to give away another $15 billion of our money. From The Associated Press:
Congressional Democrats and the White House worked to resolve their last disputes Monday over terms of a $15 billion bailout for U.S. auto makers – complete with a “car czar” to oversee the industry’s reinvention of itself – that’s expected to come to a vote as early as Wednesday.Top Democrats gave the White House their proposal for rushing short-term loans to Detroit’s Big Three through a plan that requires that the industry remake itself in order to survive. The Bush administration gave a cool initial response, saying the measure didn’t do enough to ensure that only viable companies would get longer-term federal help. Negotiators worked into the night Monday to resolve differences.
“We’ve made a lot of progress in recent days to develop legislation to help automakers restructure and achieve long-term viability,” Dana Perino, the White House press secretary, said in a statement. “We’ll continue to work with members on both sides of the aisle to achieve legislation that protects the good faith investment by taxpayers.”
President George W. Bush himself said it was “hard to tell” if a deal was imminent because definite conditions had to be met. “These are important companies, but on the other hand, we just don’t want to put good money after bad,” he said in an interview with ABC’s “Nightline.”
The leading candidate for the position of car czar is Kenneth Feinberg, a lawyer who is well know for his handling of the September 11 compensation fund. From FOX News:
Kenneth Feinberg, the attorney who appears set to become the “car czar” for the federal government’s auto bailout package, is seen as a widely acceptable candidate to span two administrations.
Democratic Senate sources told FOX News that Feinberg has been named to oversee the government plan to help General Motors, Ford Motor Co. and Chrysler spend a multi-billion bailout. The White House received Congress’ plan for those emergency loans on Monday and is reviewing whether the deal could get done as early as next week.Feinberg would write guidelines — due on the first of the year — for a restructuring of the Big Three, and would be responsible for recalling the cash if he thinks the companies are not spending the money wisely by Feb. 15.
Although the details of the plan are still sketchy and have yet to become full public knowledge, it is clear that the car czar is going to have the authority to deny or approve any major financial decisions by the automakers and to take away the bailout money, if he deems it necessary. That being said, Feinberg needs to do a much better job than did Henry Paulson. So far, Paulson’s track record on using the original $700 billion has not been so good.
Let me go on the record, as I have in the past, that I do not believe our government should be in the business of bailing out private companies and I am hoping against hope that enough members of Congress will stand their ground and vote this proposal down. However, if Congress and the White House insists on going down this road, maybe it is a good thing to have someone in charge of making sure the automakers are doing what they said they would do with the money. Otherwise, we may see the same old story of greed that got our economy into this fiasco in the first place.
That’s my take!
Larry
