ShareThisA senator who played a pivotal role in the failed efforts to produce a financial bailout for the nation's ailing automakers urged the White House on Friday to demand concessions from the companies if it gives them billions of dollars in emergency relief.
Without the conditions, "an incredible opportunity will have been wasted" to force the companies to take steps that will make them competitive, said Sen. Bob Corker, R-Tenn.
A $14 billion package that would have provided General Motors and Chrysler with emergency loans collapsed in the Senate late Thursday night after Republicans were unable to get the United Auto Workers to agree to concessions.
General Motors and Chrysler have said they may run out of money in weeks without the loans.
Hours after the talks collapsed, the White House indicated it might provide the automakers with the money from the Wall Street bailout approved in October.
Corker, who was one of the lead negotiators in the Senate, said he talked to Treasury Secretary Henry Paulson on Friday and recommended that, if the administration provides relief funds for the auto industry, the money should come with the same strings that had been sought by Senate Republicans.
Corker declined to say whether Paulson promised to seek the concessions.
But, "I do think Secretary Paulson feels like we were trying to reach a solution, and I think he's very appreciative of those efforts," Corker said. "And I think much of what we've done lays the foundation for what could occur."
Corker said the automakers had agreed to two of the three concessions that Republicans sought during the negotiations.
One would have required the companies, as a condition for receiving the loans, to cut two-thirds of their debt by March 15 or file for bankruptcy. The other would have required them to change the way payments are made to a union retiree benefits plan, which Corker estimates could have saved $10.5 billion.
The sticking point came over a proposal that the United Auto Workers accept a labor agreement that would've made the car manufacturers competitive with non-union, foreign-based companies such as Honda, Toyota, Nissan and BMW in terms of wages and other employee benefits.
The negotiations collapsed, Corker said, because union officials would not agree to a definitive date on which the companies would have to be certified as competitive.
"There were three words literally that separated us from coming to a landmark agreement," he said.
Corker said he believes union officials wouldn't set a date because they thought the White House would be willing to offer the money with no strings attached if negotiations broke down with the Senate.
"That is the thing that kept them from crossing the threshold," he said.
Corker said he had been concerned during the negotiations about the impact that failure to reach an agreement might have on the stock market.
But if the Bush administration is able to broker a deal similar to what Senate Republicans had been seeking, "it will be historic from the standpoint of what it will do for these companies, what it does for our country and certainly for all of the employees that work there," he said.
(E-mail Michael Collins at collinsm(at)shns.com.)
(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)
A Letter to the President (the one in the White House)
I cannot adequately express the grief and disappointment I feel in my government. I see America crumbling under the weight of corruption and government intrusion into the private sector. My grievance is not with any one party, but rather with the government as a whole. I lost my job on March 10, 2008. I watched the government throw $700B at the financial markets in a rushed manner, served on a platter of fear, and poorly planned. And now I see the program has failed as banks and other financial institutions are hoarding that taxpayer money. The TARP did not help me or others like me at all. No, the government helped the elite.
I have watched my government try to pass legislation to bail out a completely dysfunctional auto industry with yet more taxpayer money. I hear much discussion about protecting autoworker’s jobs, but I have heard nothing about the rest of us. I am not greatly bothered by this as I am a proud and principled American who will face whatever destiny awaits me.
The Legislative Branch of our government has a specific job to perform defined by, and within the limits of, our Constitution. When we do not like what comes out of both houses of Congress, we do not presume to believe that the Executive Branch is unconditionally granted the freedom of running rough shod over the Legislative Branch no matter what the interest of the Executive Branch may be. We let the Legislative Branch do its job and we stand by the result of their efforts whether we like it or not – unless it is unconstitutional.
Now I read that the President is planning on taking unilateral action to draw funds from TARP to bailout the automakers without the consent of my congressional representatives; my Senators and House Representative. Oh, they may not have a problem with your proposal, but that does not in any way make it right or just. It is wrong in principle, and it violates the Equal Protection Clause as stated in the 14th Amendment of our Constitution. In addition, I am of the opinion that such a proposal annunciated by your administration tramples under trias politica. Indeed this model of a democracy is clearly documented in the United States Constitution, Article I, Section 8: which places all the power of the government in the Congress to make all the laws.
Yet the sum of all guidance divined from our Constitution is being set aside for what might be considered for the good of the many. However, does setting aside our Constitution, for even the most noble of causes in fact and in truth serve the greater good? I should think the founders of our country and the framers of our Constitution would answer in the negative.
The TARP was funded for the purpose of assisting Financial Institutions. I direct your attention to the following interpretation of “Financial Institution” as documented in the TARP bill (Emergency Economic Stabilization Act of 2008, Public Law 110-343):
Financial Institution - The term “financial institution” means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands, and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign government.
This definition contained in the statute does not leave much room for interpretation.
Automakers are not Financial Institutions and thus, to draw funds from TARP for any other purpose than to assist Financial Institutions without the protection of representation afforded me by the Constitution and through my Senators and Representative is wrong by any measure. And should my Senators and Representative not act to prevent such action is to abrogate their Constitutional duties and responsibilities and render them unfit for presiding over the matters of, and brought forth by the people of the United States of America.
Should you proceed, you will release America into a deep and unexplored abyss of historic proportions. I advise good measure and profound thought before you make any decision in regard to drawing taxpayer dollars from TARP to be given over to any public or private business that does not meet the definition of “Financial Institution”.
Thank you.