White House Approves $17.4 Billion Auto Bailout

Posted by Jeff Pruitt - 12/19/08 @ 10:36 am - Filed Under National Politics

From the AP via TPM:

Citing danger to the national economy, the Bush administration came to the rescue of the U.S. auto industry Friday, offering $17.4 billion in emergency loans in exchange for concessions from the deeply troubled carmakers and their workers.

President Bush said, “Allowing the auto companies to collapse is not a responsible course of action.” Bankruptcy, he said, would deal “an unacceptably painful blow to hardworking Americans” across the economy.

Bush said the rescue package demanded concessions similar to those outlined in a bailout plan that was approved by the House but rejected by the Senate a week ago. It would give the automakers three months to come up with restructuring plans to become viable companies.

He said the companies’ workers should agree to wage and work rules that are competitive with foreign automakers by the end of next year.

And he called for elimination of a “jobs bank” program — negotiated by the United Auto Workers and the companies — under which laid-off workers receive unemployment benefits and supplemental pay from their companies for 48 weeks. If they remain laid off beyond that, they move to a jobs bank in which the company provides about 95% of their pay and benefits. Until the most recent contract, people could remain in the jobs bank for years. Early this month, the UAW agreed to suspend the program.

This may be one of the few decisions I’ve ever agreed with Bush administration on - clearly that gives me pause that this could be the wrong decision.

But we can’t forget about the crooks on Wall Street:

At the same time, Treasury Secretary Henry Paulson said Congress should authorize the use of the second $350 billion from the financial rescue fund that it approved in October to rescue huge financial institutions. Tapping the fund for the auto industry basically exhausts the first half of the $700 billion total, he said.