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Rep. Barney Frank (D-Mass.) said lawmakers will attach several conditions for Detroit automakers in return for $25 billion in federal aid.
Frank said Sunday that automakers will be required to submit to Congress their plans for future economic viability and environmental efficiency.
He defended the aid, warning that the economy would receive a painful shock if policy makers allowed automotive giant General Motors, which is running out of cash, to go bankrupt.
“When you talk about the negative shock that would result from bankruptcies of these companies right now…. There are suppliers out there who are owed money, smaller businesses. They get hurt in a bankruptcy,” he said on CBS’s “Face the Nation.”“And we all agree that they need to make fundamental changes,” Frank said.
“The question is how much pain can the rest of the economy take while those changes are being implemented.”
It remains up in the air whether Democrats will have enough votes to overcome GOP opposition to the bailout, but Senate Majority Leader Harry Reid (D-Nev.) has decided to bring the $25 billion in aid combined with a $6 billion extension of unemployment benefits to the floor Monday.
Senate Republican Whip Jon Kyl (Ariz.) declared on Fox News Sunday that the package would not pass.
“It's a perfect political setup. And I wonder if that isn't really the point of the exercise this week, since it's pretty clear that it's not going to pass,” said Kyl. “Why wouldn't the Democratic leadership wait until next year."
“I suppose most of us will oppose it as a very bad idea,” he said in reference to Senate Republicans. “This didn't happen to the auto companies overnight. For years they've been sick. They have a bad business model. They have contracts negotiated with the United Auto Workers that impose huge costs.”
Republicans have argued that Chapter 11 bankruptcy would give General Motors a chance to restructure their operations to become more competitive.
“Some people believe that Chapter 11 bankruptcy would be a lot better management than what we have today, where they would reorganize, they would get rid of the management that has brought them to where they are today: bloated contracts [and] everything that goes with it,” said Senate Banking Committee ranking Republican Richard Shelby (R-Ala.), who debated Frank on “Face the Nation.”
Frank said broad stimulus legislation to revive the ailing economy will wait until next year given opposition from President Bush and congressional Republicans. |
