By Mike Soraghan - 06/07/09 11:24 AM EDT
The Obama administration has a familiar response to criticism of the General Motors bailout – they inherited this mess from George W. Bush.
Austan Goolsbee, a senior economic adviser to President Obama, said the administration's options were sharply limited by President Bush's handling of the auto industry, and accused the prior administration of running out the clock.
"They shook up the can. They opened the can and handed [it] to us in our laps," Goolsbee said on Fox News Sunday.
"When George Bush put money into General Motors, almost explicitly with the purpose -- how many dollars do they need to stay alive until January 20th, 2009, there was no commitment to restructuring, to making these viable enterprises of any kind," said Goolsbee, who serves as staff director and chief economist of the Obama's Economic Recovery Advisory Board.
In his first five months in office, Obama has often said that some of the politically difficult decisions he's made are the fault of his predecessor, most notably the $1.3 trillion budget deficit.
But he'd previously been more supportive of Bush's handling of the crisis in the auto industry. When Bush sent $17.4 billion of the $700 billion bailout package to GM and Chrysler in December, Obama issued a statement calling Bush's move "a necessary step."
The Obama administration has steered the two troubled companies into bankruptcy and recently announced $30 billion in aid to General Motors, giving the government about 60 percent ownership of the company. Chrysler has been cleared to merge with Italian automaker Fiat.
Republicans have derided the takeover as creating "Government Motors." On Fox News Sunday, Sen. Richard Shelby (R-Ala.), criticized the administration's handling of the takeover, saying it had favored labor – a key Democratic constituency – over bondholders.
"The bondholders have been sacrificed. The unions have carried the day," said Shelby, the ranking Republican on the Senate Banking Committee.
--Updated 3:01 p.m.