This is heartbreaking. On a scale of 1 to 10, I give this Bush Administration failure 10 Shoes.
President Bush on Friday announced $13.4 billion in emergency loans to prevent the collapse of General Motors and Chrysler, and another $4 billion available for the hobbled automakers in February with the entire bailout conditioned on the companies undertaking sweeping reorganization plans to show that they can return to profitability.
Mr. Bush made his announcement a week after Senate Republicans blocked legislation to aid the automakers that had been negotiated by the White House and Congressional Democrats, and the loan package announced by the president includes roughly the identical requirements in that bill, which had been approved by the House.
Republican Senators killed the identical proposal. Bush resurrected it.
The loan deal also requires the companies to quickly reduce their debt obligations by two-thirds, mostly through debt-for-equity swaps, and to reach an agreement with the United Auto Workers union to cut wages and benefits so they are competitive with those of employees of foreign-based automakers working in the United States.
The debt reduction and the cuts in wages were central components of proposal by Senator Bob Corker, Republican of Tennessee, who tried to salvage the auto bailout legislation.
President Bush effectively squashed the plan that Senator Corker was working on when he signaled to auto and union officials that he was willing to deal.
Those talks had deadlocked on a demand by Republicans that the wage cuts take effect by a set date in 2009, while the union had pressed for a deadline in 2011 after its current contract expires.
They knew that they had the luxury of being inflexible because if the deal fell through, the White House would come to the table.
The plan announced on Friday by Mr. Bush offered a compromise between those positions, by making the requirements non-binding, allowing the automakers to reach different arrangements with the union, provided that they explain how those alternative plans will keep them on a path toward financial viability.
This is a total betrayal of the American public and of the hard work that the Senate Republicans did to ensure accountability in the process. Detroit and the UAW have given us every reason to distrust their ability to reach anything other than stalemates and untenable compromises. This “non-binding” compromise is the equivalent of complete capitulation. Now we know what it means to “abandon free market principles to save the free market system.” It means President Bush has thrown the Free Market System in the garbage.
Other bloggers on this topic: Michelle Malkin, Ed Morrissey (with video that I don’t have the stomach to post here.)
1 Comment
December 19, 2008 at 10:24 am
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