House Approves Automaker Bailout Bill

Submitted by Conor Kenny on

By Congresspedia assistant editor Avelino Maestas

The House approved automaker bailout legislation last night by a 237-to-170 margin. The $14 billion stipulated in the Auto Industry Financing and Restructuring Act would go to help struggling U.S. automakers, and would be provided in the form of bridge loans.

President George W. Bush was able to win some concessions from Democratic House leaders, who inserted a provision that would require the Big Three automakers (Chrysler, Ford and General Motors) to restructure operations, negotiate with labor unions to lower costs, and eliminate debt. Otherwise, the government could withhold or even take back the loans.

While the legislation had a comfortable margin in the House, Republicans in the Senate are taking a much tougher stance against the bill. Several GOP Senators have called on the automakers to enter into Chapter 11 bankruptcy, while Minority Leader Mitch McConnell (R-Ky.) has not said publicly what he believes should happen.

Democrats will have to persuade several Republican senators to cross party lines and vote on the measure, if they hope to defeat a likely filibuster. The majority party is handicapped, since President-Elect Barack Obama resigned his seat. In addition, Sen. Ted Kennedy (D-Mass.) may not be able to vote, due to his health. Vice President-Elect Joe Biden will remain a Senator until he is sworn in on inauguration day, and has pledged to return to Washington if his vote is needed.

In other news, the House voted last night to approve an increased oversight role for the Government Accountability Office (GAO), requiring them to report on how much new lending financial institutions have made since implementation of the Troubled Asset Relief Program. That program was authorized as part of the $700 billion financial industry bailout bill, approved by Congress earlier this year. Lawmakers want to monitor whether banks and other institutions are using the relief funds to increase liquidity.

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Comments

Prestiti replied on

Though the house has approved a $14 billion government rescue of the American automobile industry, but the bailout plan, which provide emergency loans to General Motors and Chrysler, was of no use as there is bond to strong opposition in the senate from the Republican. <a href="http://www.prestiti-online.org/">Prestiti</a>

Wilbert replied on

I agree. I am very sceptical about the non-political reasoning behind the bailout. What I disliked the most about it was the fact that they gave all that money to the automotive industry. There still are people out there that are suffering because of the crisis and are still having problems because of all the wrong decisions made.