The United Auto Workers (UAW) should be made to testify before a hearing this morning on the government's assistance for the auto industry, the lone lawmaker on the panel overseeing the bailout programs said Monday.
Rep. Jeb Hensarling (R-Texas), the lone serving member of Congress and Republican appointee to the Congressional Oversight Panel monitoring the Troubled Asset Relief Program (TARP), called the auto union's absence at a hearing in Detroit on the bailouts for Chrysler and General Motors "outrageous."
"The UAW came before Congress and pleaded for billions of taxpayer assistance. Their ownership stakes in Chrysler and GM look suspicious at best and like sweetheart deals at worst," Hensarling said in a statement about today's hearing. "It's outrageous they would benefit from the taxpayers' money and then refuse to testify about it."
The hearing, taking place at Wayne State University in the heart of Detroit, will hear testimony from representatives of Chrysler and GM, as well as the head of President Obama's Auto Task Force.
The U.S. Chamber of Commerce backed Judge Sonia Sotomayor's nomination to the Supreme Court on Thursday, saying they expect her to treat businesses fairly as a member of the highest judicial body.
"Consistent with her recent testimony, we expect Judge Sotomayor to engage in fair and evenhanded application of the laws affecting American businesses," said Chamber President and CEO Thomas J. Donohue in a statement.
The backing represents a bit of a surprising public backing of a judicial candidate by the leading business group. The announcement comes before a vote on the Senate floor on Sotomayor's confirmation next week in which she's expected to be confirmed with strong Democratic backing and some Republicans' support.
Donohue explained the Chamber's reasoning for endorsing the Supreme Court candidate in his statement.
"In recent years, the Supreme Court has played an increasingly important role in deciding issues that affect the business community," he said. "A healthy economy requires a healthy respect for the rule of law. We expect all the Supreme Court Justices to apply the law fairly and predictably, and not to legislate from the bench."
Treasury Secretary Tim Geithner might face the same congressional grilling his predecessor and Federal Reserve Chairman Ben Bernanke have received in recent weeks if one Republican lawmaker gets his way.
Rep. Patrick McHenry (R-N.C.) called on Geithner to testify in the House Oversight and Government Reform Committee's ongoing investigation into the deal between Wall Street heavyweights Bank of America and Merrill Lynch late last year.
The committee has probed whether or not then-Treasury Secretary Henry Paulson and Bernanke acted to pressure Bank of America last December against backing out of its bid to acquire Merrill, and whether or not they concealed information from shareholders that might have scuttled a deal.
McHenry said that Geithner, then head of the New York branch of the Federal Reserve, should testify about his role.
"The key person who's missing from this is Timothy Geithner, then head of the new York Fed," McHenry said during an appearance on the Fox Business Network on Friday. "We need to hear from Tim Geithner about what he did, his actions."
In particular, McHenry said he's interested in learning whether or not Geithner directed his office of legal counsel to pressure Bank of American into delaying information about Merrill's dire balance sheet situation.
"The interest I have as a policy maker is to ensure two government bureaucrats didn't threaten private sector business with retaliatory actions for not following through on a private sector deal," McHenry said, before adding that for some other lawmakers, the investigations are motivated by "buyer's remorse" about Congress's authorization of the Troubled Asset Relief Program (TARP) bailout last fall.
Former Treasury Secretary Henry Paulson has "misled" Congress about his role in influencing Bank of America's decision to acquire Merrill Lynch late last year, one Democratic lawmaker alleged Thursday.
Rep. Stephen Lynch (D-Mass.) accused Paulson of being less-than-forthcoming during his testimony before the House Oversight and Government Reform Committee this morning.
In testimony and questioning, the former Treasury secretary defended his work late last year to forestall BofA from backing out on a deal to buy Merrill after the former got a closer look at the latter's fourth quarter earnings.
"In my opinion, you misled Congress," Lynch told Paulson Thursday morning. Lynch said that Paulson would have never gotten support from lawmakers for his plans to bail out banks in the manner he had.
"That's why I think you misled Congress," Lynch said.
In particular, Paulson denied coordinating with Federal Reserve Chairman Ben Bernanke to pressure BofA into the deal.
"I have had so many calls with Ben Bernanke, that I have trouble distinguishing one from another," Paulson told lynch.
Former Treasury Secretary Henry Paulson will be met "somewhat cruelly" by lawmakers tomorrow when he testifies on Capitol Hill.
Paulson is set to defend his actions in last fall's merger between Bank of America and Merrill Lynch in sworn testimony before the House Oversight and Government Reform Committee.
"I think he's going to be received somewhat cruelly," Rep. Darrell Issa (R-Calif.), the ranking member of that committee, said Wednesday on the Fox Business Network in anticipation of the testimony.
Paulson will say that while he communicated some potential consequences to Bank of America executives after they got cold feet in the Merrill deal, he never acted inappropriately, or acted at the behest of Federal Reserve Chairman Ben Bernanke.
Issa said Paulson's testimony attempts to "thread the needle," and demonstrates "the hubris of government."
The California Republican said Paulson "clearly" threatened Bank of America officials during last December's wranglings. "It was clearly a use of $700 billion of walking-around money that Congress had given these people, and they were using it as both a carrot and a stick," Issa said.
Issa added that he hoped that Oversight hearings with Paulson and Bernanke will give Congress pause before granting an administration the kind of extraordinary powers and spending authority contained in last fall's Troubled Asset Relief Program (TARP).
Former Treasury Secretary Henry Paulson will deny any inappropriate actions to pressure or manipulate Bank of America into accepting a buyout of Merrill Lynch during the height of the financial crisis last year.
Paulson acknowledged that he brought up the Federal Reserve's ability to remove Bank of America's corporate management, but defended his actions to prevent a collapse in the deal as entirely appropriate, and on his own behalf.
Paulson is set to testify tomorrow before the House Oversight and Government Reform Committee, which has investigated the government involvement in the BoA-Merrill deal. Republicans on the committee have asserted that Federal Reserve Chairman Ben Bernanke has lied or been misleading in testimony about his role in the deal.
"Although attention has recently focused on brief moments of stress during the events of December 2008, those moments are not foremost in my recollection," Paulson will tell the committee.
"What I recall most vividly is a nation faced with the threat of an unparalleled economic crisis and the efforts of the men and women from both the public and private sectors who worked hard to steer our country away from that precipice," he'll continue. "It was my privilege to work with them, and I am proud of what we accomplished."
The head of President Obama's Auto Task Force has decided to step down from that position, the Treasury Department announced Monday.
Steve Rattner, a financier and investor who was tapped to lead the administration's efforts to restructure General Motors and Chrysler, "has decided to transition back to private life and his family in New York City," Treasury Secretary Tim Geithner said in a statement.
Rattner's tenure as head of the Presidential Task Force on the Auto Industry saw the Obama administration initially reject restructuring plans of GM and Chrysler and demand the resignation of GM's then-CEO, Rick Wagoner, before both of the automakers were eased into a prestructured bankruptcy in late spring.
Ron Bloom, a former top official for the United Steel Workers who had been serving as Rattner's principal co-chair of the task force, will now assume leadership of the task force, the Treasury said.
Rattner's decision to return to private life comes after GM emerged from bankruptcy last week to complete the months-long restructuring of the company.
"We are extremely grateful to Steve for his efforts in helping to strengthen GM and Chrysler, recapitalize GMAC, and support the American auto industry," Geithner said in a statement announcing Rattner's departure. "I hope that he takes another opportunity to bring his unique skills to government service in the future."
"There is still much work ahead to ensure that GM and Chrysler re-emerge as stronger, more competitive companies. President Obama has made it perfectly clear that it is the responsibility of their private boards of directors and management teams to deliver that result," Geithner added. "And thanks to the hard work of Steve, Ron, and the entire Auto Task Force, they have a much better chance today of rebuilding those companies and making them once again symbols of American success."
Michigan's unemployment rate could hit as high as 20 percent with the Obama administrationto blame, one Michigan congressman warned Friday.
Rep. Thaddeus McCotter (R-Mich.) said that Michigan's unemployment -- already the highest in the country at 14.1 percent -- could go even higher as General Motors and Chrysler continue to shed jobs after their government-financed bankruptcies.
"Sadly, we've seen estimates, because of the radical restructuring that the auto task force demanded, that this year, Michigan wind up over 20 percent unemployment," McCotter said during an appearance on a conservative news radio program.
McCotter warned that the effect of such a high jobless number could spread to other states and cities.
"That cascading effect throughout the entire economy -- and throughout other states -- that rely in many ways on the manufacturing base is going to have devastating effects not only to state government, it's going to have devastating effects for local government," McCotter explained.
General Motors has exited from federal bankruptcy protection, according to multiple reports Friday morning.
After having filed for bankruptcy on June 1, the newly-reorganized automaker will reemerge backed by a substantial ownership stake by the federal government.
The Obama administration and its auto task force had helped coordinate a prepackaged bankruptcy for the storied automaker after providing months of assistance to GM, as well as Chrysler.
President Obama himself has staked some of his legacy on the success or failure of GM over the long haul; during the process of easing GM into bankruptcy, his administration requested the resignation of the company's CEOs.
The hefty government investment in GM -- expected to cost taxpayers tens of billions of dollars when all's said and done -- has not been without criticism. Conservative Republicans have bemoaned the excessive involvement in the affairs of the market, while more broadly, lawmakers have complained about the adverse effects suffered by dealers and manufacturers that were shut down over the course of GM's restructuring.
The new GM's top executives will brief the media this morning.
The Obama administration and congressional Democrats want to convert the Federal Reserve into a "permanent bailout authority," the Financial Services Committee's top Republican member warned Thursday.
Rep. Spencer Bachus (R-Ala.) warned that proposed reforms for regulations governing the financial industry would give the Fed too much power, and endlessly sustain the kind of bailouts first seen last fall.
"I don't think they were ever intended to use taxpayer dollars to prop up individual financial institutions," Bachus said of the Fed's proposed new role during an interview on Bloomberg News. "Unfortunately, the Democrats and the administration want to make them a permanent bailout authority."
The Alabama lawmaker, ranking member of the Financial Services Committee, said that the Fed was not sufficiently transparent or accountable to justify giving it new powers under a reformed regulatory regime.
"We think we ought to have an exit strategy, not permanently adopt a 'too big to fail' doctrine," he said.
Bachus indicated he preferred the Federal Deposit Insurance Corporation (FDIC) remain in charge of failed banks -- so that the troubled institutions be shut down, instead of sustained by taxpayer infusions.
"I think there is one regulator who decides who fails and who doesn't, and that's the market," he said. "And that's the American way of doing business."
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