PolitiFact reviews, but does not rate, Obama's auto bailout claims

Fact checking has emerged as flash point in the 2012 presidential campaign, and one of the most frequently-cited fact checkers took a look Thursday at Democrats' claims this week that President Obama saved the U.S. auto industry.

PolitiFact, which is run by the Tampa Bay Times in Florida, said the effect of the $80 billion that was loaned to two of the largest U.S. auto companies in 2008 and 2009 is “more a matter of opinion, and not an item for the Truth-O-Meter.”

But the popular fact-checking website added “[I]n broad strokes, the answer is yes, but with some help from the other party and with one huge unknown — no one can say what would have happened without massive government intervention.” 

“We spoke with a number of analysts and read many independent reports. There is no question that General Motors and Chrysler are profitable today,” PolitiFact wrote. “But so is Ford, a company that received no financial aid at all. The jobs have returned — although not nearly at the level they were before the industry began its steep decline in 2007. Without a doubt, the American auto industry emerged smaller and more competitive.”

PolitiFact countered Democratic arguments at the party’s convention this week that President Obama was solely responsible for the turnaround of the U.S. auto industry.

“Barack Obama, however, cannot claim full credit for this outcome,” PolitiFact wrote. “According to several experts, he needs to share it with his predecessor, President George W. Bush. Dr. James Rubenstein at Miami University co-wrote a post-bankruptcy assessment for the Federal Reserve Bank of Chicago. Rubenstein said no one should overlook the importance of Bush’s decision to use $17.6 billion in TARP money in December 2008 to keep General Motors and Chrysler afloat.”

The auto bailouts became closely associated with Obama after he imposed conditions on the second round of loans to GM and Chrysler, including insisting on the removal of the president of General Motors.

Conservative critics of the bailout point out that the federal government has not recovered $1.9 billion of its investment in the parts of Chrysler that were not sold to Italian automaker Fiat in a deal arranged by the Obama administration. They also derisively refer to GM as “Government Motors” because the federal government still owns shares in the company.

Democrats have worked for months to turn the auto loans, which were initially unpopular, into a political winner for Obama.

They have tried to avoid referring to the payments to GM and Chrysler as a “bailout,” however, acknowledging the political toxicity of the word now.  Instead, Democrats have been touting an “auto rescue,” for which they give Obama credit entirely.

But PolitiFact said Thursday the credit should be shared with Obama’s predecessor, as Democrats have readily done with lingering problems plaguing the national economy.

“The massive loss of jobs and the disruption to the network of auto parts suppliers did not happen,” PolitiFact said. “The shock that might have hit all car makers and the overall economy is not staring lawmakers in the face. Given the tangible reality of today, the view among most analysts is that President Bush kept the carmakers afloat long enough for President Obama to put them on solid footing moving forward. If that matches the definition of a rescue, then both presidents saved the auto industry.”

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