It's about time Congress did something right!
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It's about time Congress did something right!

This is a discussion on It's about time Congress did something right! within the Off-Topic forums, part of the Main Category category; I've felt all along that the best thing to do was to let them file for bankruptcy and go from ...

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    tattedupboy's Avatar
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    Default It's about time Congress did something right!

    I've felt all along that the best thing to do was to let them file for bankruptcy and go from there.

    Union balks and $14B auto bailout dies in Senate - Yahoo! News

    WASHINGTON A bailout-weary Congress killed a $14 billion package to aid struggling U.S. automakers Thursday night after a partisan dispute over union wage cuts derailed a last-ditch effort to revive the emergency aid before year's end.

    Republicans, breaking sharply with President George W. Bush as his term draws to a close, refused to back federal aid for Detroit's beleaguered Big Three without a guarantee that the United Auto Workers would agree by the end of next year to wage cuts to bring their pay into line with Japanese carmakers. The UAW refused to do so before its current contract with the automakers expires in 2011.

    The breakdown left the fate of the auto industry and the 3 million jobs it touches in limbo at a time of growing economic turmoil. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

    Democratic leaders called on Bush to immediately tap the $700 billion Wall Street bailout fund for emergency aid to the auto industry, whose fate along with that of the roughly 3 million jobs it touches was in limbo.

    Majority Leader Harry Reid, D-Nev., called the bill's collapse "a loss for the country," adding: "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."

    GM said in a statement it was "deeply disappointed" that the bipartisan agreement faltered. "We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis," the company said. Chrysler also said it "will continue to pursue a workable solution to help ensure the future viability of the company."

    The White House said it was evaluating its options in light of the breakdown on Capitol Hill.

    "It's disappointing that Congress failed to act tonight," Deputy Press Secretary Tony Fratto said in a statement. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."

    That bill the product of a hard-fought negotiation between congressional Democrats and the Bush White House was virtually dead on arrival in the Senate, where Republicans said it was too weak in its demands on the car companies and contained unacceptable environmental mandates for the Big Three.

    Thursday's implosion followed yet another set of marathon negotiations at the Capitol this time involving labor, the auto industry and lawmakers. The group came close to agreement, but it stalled over the UAW's refusal to agree to the wage concessions.

    "We were about three words away from a deal," said Sen. Bob Corker of Tennessee, the GOP's point man in the negotiations, referring to any date in 2009 on which the UAW would accept wage cuts.

    The Senate rejected the bailout 52-35 on a procedural vote well short of the 60 required after the talks fell apart. Just 10 Republicans joined 40 Democrats and two independents in backing it. Three Democrats sided with 31 Republicans in opposition. Reid also voted "no" for procedural reasons.

    Congress is not scheduled to return for legislative work until early January.

    Some Senate Democrats joined Republicans in turning against the House-passed bill despite increasingly urgent expressions of support from the White House and President-elect Barack Obama for quick action to spare the economy the added pain of a potential automaker collapse.

    "In the midst of already deep and troubling economic times, we are about to add to that by walking away," said Sen. Chris Dodd, D-Conn., the Banking Committee chairman who led negotiations on the package.

    Alan Reuther, the UAW's legislative director, declined comment to reporters as he left a meeting room during the negotiations. Messages were left with Reuther and UAW spokesman Roger Kerson.

    The stunning disintegration was eerily reminiscent of the defeat of the $700 billion Wall Street bailout in the House, which sent the Dow tumbling and lawmakers back to the drawing board to draft a new agreement to rescue financial institutions and halt a broader economic meltdown. That measure ultimately passed and was signed by Bush.

    It wasn't immediately clear, however, how the auto aid measure might be resurrected, with Congress now set to depart for the year.

    Democratic House Speaker Nancy Pelosi called Senate Republicans' refusal to support the White House-negotiated bill irresponsible and urged the Bush administration and the Federal Reserve to provide short-term relief for the automakers. "That is the only viable option available at this time," she said.

    Congressional Republicans have been in open revolt against Bush over the auto bailout. Senate Minority Leader Mitch McConnell of Kentucky joined other GOP lawmakers Thursday in announcing his opposition to the White House-backed bill, which passed the House on Wednesday. He and other Republicans insisted that the carmakers restructure their debt and bring wages and benefits in line with those paid by Toyota, Honda and Nissan in the United States.

    Hourly wages for UAW workers at GM factories are about equal to those paid by Toyota Motor Corp. at its older U.S. factories, according to the companies. GM says the average UAW laborer makes $29.78 per hour, while Toyota says it pays about $30 per hour. But the unionized factories have far higher benefit costs.

    GM says its total hourly labor costs are now $69, including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.

    Republicans also bitterly opposed tougher environmental rules carmakers would have to meet as part of the House-passed version of the rescue package, and the Senate dropped them from its plan.

    The House-passed bill would have created a Bush-appointed overseer to dole out the money. At the same time, carmakers would have been compelled to return the aid if the "car czar" decided the carmakers hadn't done enough to restructure by spring.

    The House approved its plan late Wednesday on a vote of 237-170.

    A pair of polls released Thursday indicated that the public is dubious about the rescue plan.

    Just 39 percent said it would be right to spend billions in loans to keep GM, Ford and Chrysler in business, according to a poll by the nonpartisan Pew Research Center. Just 45 percent of Democrats and 31 percent of Republicans supported the idea.

    In a separate Marist College poll, 48 percent said they oppose federal loans for the struggling automakers while 41 percent approved.
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    Amen to that.
    "It was worth it all, for the Great Warrior"

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    Everyone is willing to make concessions but the Union. I'm glad they shot them down.
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    Good call. Now we should go back and demand our money back from AIG and the banks.

    I hate this attitude of rubber-stamping spending every time someone has a sob story. We need to just start telling people...tough luck, find another shoulder to cry on.

    Additionally, GM made all sorts of long-term promises to workers with regard to benefits and pensions. They should have set those aside in standalone funds that could grow without being touched - but apparently they didn't, because now they're decreasing those people's pensions. What's wrong with this picture?

    If they go into bankruptcy, the companies should sue their executives who led them to make poor business decisions, and recoup some of that money, to use to pay their bills.
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    Default Follow up

    Bailout dead, automakers in search of a lifeline - Yahoo! News



    WASHINGTON The auto industry's cash-flow crisis has landed back at the White House doorstep and no "Welcome" mat is yet in sight.

    "For God sakes, I hope the presidentf acts," Mayor Virg Bernero of Lansing, Mich., exclaimed Friday morning.

    General Motors Corp. and Chrysler LLC, which have said they could run out of cash within weeks, have few options left after the dramatic defeat in the Senate of a $14 billion bailout for the domestic auto industry.

    Its demise late Thursday prompted immediate calls from lawmakers in both parties for the Bush administration to tap into the $700 billion Wall Street bailout to rescue the beleaguered auto industry. The bill failed after talks broke down over the refusal of the United Auto Workers union to meet Republican demands for aggressive wage reductions.

    The Senate rejected the bailout 52-35 on a procedural vote well short of the 60 required after the talks fell apart.

    "I dread looking at Wall Street," said Senate Majority Leader Harry Reid in anticipation of Friday's stock market reaction. "It's not going to be a pleasant sight."

    Indeed, stock markets in Asia and Europe dropped sharply on Friday after getting word of the bailout's failure, and U.S. markets were set to plunge when trading opened. Dow Jones industrial futures were down more than 200 points.

    The Bush administration has repeatedly opposed using a bailout fund being administered by the executive branch, saying it should not be used for emergency aid to the automakers because it was designed specifically to restore stability to the financial sector. Following the vote, the White House said it was studying its options.

    "Due to this colossal failure by the U.S. Senate, now it's up to the president and the Treasury secretary," Bernero said Friday on CBS' "Early Show." "Working Americans will appreciate the president stepping in and pull us back from the precipice, pull us back from the economic cliff."

    Lawmakers, who aren't scheduled to return to legislative work until early January, were looking to the president, as well.

    "Plan B is the president," said Sen. Carl Levin, D-Mich. House Speaker Nancy Pelosi said action by President George W. Bush was the "only viable option."

    General Motors and Chrysler are in the most immediate danger while Ford Motor Co. has said it does not need federal help now, but could face collateral damage if one of its domestic rivals fell. With the economy in recession, the auto industry has struggled with lackluster sales and choked credit markets.

    Detroit's carmakers employ nearly a quarter-million workers, and more than 730,000 others produce materials and parts for cars. If one of the automakers declared bankruptcy, some estimate as many as 3 million U.S. jobs could be lost next year.

    The White House said it was disappointed by failure of legislation that "presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."

    Many congressional Republicans and some economists said the companies would be best to pursue a prearranged bankruptcy that would allow them to restructure quickly. But most Democrats and the carmakers rejected that, arguing it would quickly lead to liquidation because consumers would never buy cars from a bankrupt auto company.

    As it lobbied unsuccessfully on Thursday, White House officials said the weak economy couldn't afford the collapse of the auto industry. President-elect Barack Obama said an industry shutdown would have a "devastating ripple effect" on the already battered economy.

    GM said in a statement is was "deeply disappointed" that the bipartisan agreement faltered. Chrysler said it was also disappointed and would "continue to pursue a workable solution to help ensure the future viability of the company."

    The companies efforts for funding failed after a marathon set of negotiations at the Capitol among labor, the auto industry and lawmakers who bargained into the night to salvage the auto bailout at a time of soaring job losses and widespread economic turmoil.

    The group came close to agreement, but it stalled over the UAW's refusal to agree to wage cuts before their current contract expires in 2011. Republicans, in turn, balked at giving the automakers federal aid.

    Aid to the automakers gained urgency last week when the government reported the economy had lost more than a half-million jobs in November, the most in any month for more than 30 years.

    The stunning disintegration of the auto bailout proposal was eerily reminiscent of the defeat of the $700 billion Wall Street bailout in the House, which sent the Dow tumbling and lawmakers back to the drawing board to draft a new agreement to rescue financial institutions and halt a broader economic meltdown. That measure ultimately passed and was signed by Bush.

    It wasn't immediately clear, however, how the auto aid measure might be resurrected in a bailout-fatigued, postelection Congress, with Bush's influence at a low ebb.

    Earlier in the week, the House approved a bill that would have created a Bush-appointed overseer to dole out the money and monitor the companies' progress in restructuring.

    Some Senate Democrats joined Republicans in turning against the House-passed bill, despite increasingly urgent calls from the White House and Obama for quick action.
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    Looks like the White House is going to step in but at least they're using money already allocated for a bail out. Before giving any money the CEO's should be fired and given no termination package, the UAW needs to be told to back off, and a viable plan should be presented on how the company's will turn themselves around.

    Wall Street bailout fund may be used to save autos - Dec. 12, 2008

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    Quote Originally Posted by ronwill View Post
    Looks like the White House is going to step in but at least they're using money already allocated for a bail out. Before giving any money the CEO's should be fired and given no termination package, the UAW needs to be told to back off, and a viable plan should be presented on how the company's will turn themselves around.

    Wall Street bailout fund may be used to save autos - Dec. 12, 2008
    They have indeed found their lifeline in the White House.

    Administration unwilling to see automakers fail - Yahoo! News

    WASHINGTON The Bush administration simply wasn't willing to stand by and watch the American auto industry financially collapse the stakes were too huge.

    So the administration committed Friday to step in and help avoid the collapse of the industry that was once the backbone of the nation's economy. Administration officials are talking with those automakers about conditions that must be met to get the aid and have not made final decisions on the size or duration of the help.

    "A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time," Bush spokeswoman Dana Perino said. She noted that in normal times the administration would prefer to let the markets determine the fate of private firms, but these times are far from normal.

    She said that because of the current state of the economy the administration would consider various options, including use of the TARP program, which has been aimed at bailing out the nation's finance system. TARP is the $700 billion Troubled Assets Recovery Program, the financial industry bailout plan enacted in October and the White House has long insisted that money should be reserved for stabilizing markets.

    Perino said that while "the federal government may need to step in to prevent an immediate failure, the auto companies, their labor unions, and all other stakeholders must be prepared to make the meaningful concessions necessary to become viable."

    The White House comments were welcomed by Sen. Carl Levin, D-Mich.

    "The effort to provide emergency bridge loans to U.S. automakers is still very much alive," Levin said. "I am encouraged that the White House said today that they will consider other options to assist the auto companies, including use of the TARP program."

    Wall Street rebounded from an early sell-off Friday to finish in positive territory after word that the government would assist U.S. automakers.

    General Motors Corp. and Chrysler LLC have warned they are running out of cash and face bankruptcy without some form of assistance. Ford Motor Co., which is in somewhat better shape financially, has been seeking access to a line of credit.

    Highlighting those difficulties, GM announced Friday it would cut another 250,000 vehicles from its first-quarter production schedule a third of its normal output by temporarily closing 20 factories across North America. The move affects most plants in the U.S., Canada and Mexico. Many will be shut the whole month of January.

    Congressional efforts to aid the industry ran aground Thursday. The White House and congressional Democrats agreed on a $14 billion measure that would have extended short-term financing to the industry while establishing a powerful new "car czar" to make sure the money was used to turn the Big Three into competitive companies. That bill passed the House on Wednesday but immediately ran into opposition from Senate Republicans who said it did not go far enough.

    On Thursday, the GOP lawmakers demanded the United Auto Workers union agree to accept a lower pay and benefits package that would be in line with compensation earned by workers at U.S. factories producing cars for Japanese companies such as Honda, Toyota and Nissan. Those companies have plants in the states represented by some of the most ardent critics of bailing out Detroit. The effort ultimately collapsed when the UAW balked at the terms demanded.

    "We've already stepped forward and made enormous concessions," UAW President Ron Gettelfinger said Friday at a news conference. "But as we made it clear ... , we were prepared to make further sacrifices. But we could not accept the effort by the Senate GOP caucus to single out workers and retirees for different treatment and to make them shoulder the entire burden of any restructuring."

    Sen. Bob Corker, R-Tenn., who played a leading role in the Republican effort, said the likelihood that the White House would step in probably made sure there would be no deal with the UAW.

    And Sen. Richard Shelby, R-Ala., who has been one of the most strident critics of bailing out the Big Three, said any plan by the Bush administration to give the automakers TARP money should require them to restructure their companies.

    "If they're going to give them TARP money, this administration ought to have the courage in its last 40 days to stand up and say, If you're going to get that money, you're going to restructure,"he told CNBC. "I don't believe the Bush administration will do that."
    Any society that would give up a little liberty to gain a little security will deserve neither and lose both.

    Benjamin Franklin

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