The final showdown between congressional Democrats and the Bush administration increasingly looks like it will be dictated by President Bush and Senate Republicans.
Democrats want to pass legislation that would send $25 billion in bridge loans to the Big Three automakers from the $700 billion financial rescue package that was signed into law last month. “We've got at least 3 million jobs dependent upon this industry surviving,” said Sen. Carl Levin (D-Mich.) Sunday on NBC's “Meet the Press.”
Democrats face strong headwinds from most Senate Republicans and Bush, who oppose using the financial bailout money to assist car companies. “I don’t believe that $25 billion will make them survive,” said Sen. Richard Shelby (R-Ala.) on the same program. “It’s just postponing the inevitable.”
The White House says automakers should instead be granted immediate financial aid from a separate $25 billion that Congress approved earlier in energy legislation.
That money, not yet spent, is intended to help car companies retool factories to meet tougher fuel-efficiency standards and encourage a more technologically advanced fleet of cars. Democrats like House Speaker Nancy Pelosi (Calif.) who for years have pushed Detroit to build more fuel-efficient cars are flatly opposed to changing the terms on how those funds can be spent.
"Any effort to divert funds,” Pelosi said, “is a step backward in assuring the viability and competitiveness of the U.S. auto industry.”
Republicans were devastated in this month's elections partly because of the public's dissatisfaction with Bush, but President-elect Barack Obama and larger Democratic majorities in the House and Senate will not take their positions until January. As a result, some Democrats predict they will not have the votes in the Senate to move a bailout bill.
Given opposition from Republicans, Democrats will probably have to move toward the White House position if they do not want the rescue to wait until Obama takes power.
Levin and others among the auto industry's closest backers are signaling they care less about the source of the money than that aid gets delivered to the industry as soon as possible. General Motors desperately needs cash to ward off bankruptcy.
“I think the leaders in both houses want this interim support, Democrats and Republicans,” Levin said on “Meet the Press.” “There are differences on which is the best way to do it. But they agree, as does President Bush and President-elect Obama, that there must be this support so we have an industry which can continue to do the innovation that has already begun.”
Opposition from Bush and the GOP has already forced Democrats to scale back their agenda for the lame-duck session, to the disappointment of influential members such as Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee. Instead of the wide-ranging and ambitious fiscal stimulus package worth several hundred billion dollars Democrats were talking up weeks ago, a tiny package involving an extension of unemployment benefits is now all that is likely.
A larger package increasing investments in infrastructure and providing aid to cities and states was largely shelved after Republicans dug in their heels.
Democrats have instead shifted their focus to enacting a broad package once Obama takes office and the party has additional votes in Congress.
The one part of the stimulus plan that may survive is a bill, already approved by the House, that would extend unemployment benefits by up to 13 weeks. The legislation would cost roughly $6 billion.
The auto bill will start on Monday in the Senate, where Democrats need 60 votes to proceed to a vote. Senate Majority Leader Harry Reid (D-Nev.) is prepared to hold a decisive procedural vote Wednesday on the bailout.
Even if senators agree to call up the bill Wednesday, Republican opponents could drag out the debate for days and force a stalemate on the issue before the Thanksgiving holiday.
The House, where the legislation would likely pass easily, has opted to await the outcome in the Senate. "More capital will be spent on the Senate side, so it makes sense [for that chamber] to do it first," said a senior Democratic aide.
Democrats hold a 51-49 majority in the Senate, and would need more than 10 GOP votes to overcome a filibuster. The party will be without a few key Democrats, including Obama, who resigned his seat on Sunday.
Sen. Chris Dodd (D-Conn.), chairman of the Banking Committee, last week cast doubt on whether enough Republicans would back the bill, saying he didn't know if a single Republican would vote for it. So far only two Republicans, Sens. George Voinovich (Ohio) and Kit Bond (Mo.), have publicly announced their support, though a Republican aide said he knew others were actively considering the legislation.
Shelby, in appearances on two Sunday talk shows, offered no predictions, but said he hoped the bill would be defeated. He also described the automotive industry as a “dinosaur” and said letting the companies downsize, possibly through a bankruptcy filing, would be a better option.
Levin, however, repeatedly voiced hope that Republicans would support the industry, and he specifically mentioned Senate Minority Leader Mitch McConnell (R-Ky.), who has auto plants in his state.
McConnell raised concerns in a letter to Reid about Republicans not having enough time to review the legislation.
“Sen. Reid has not yet provided us with the text of his proposed spending bill, or the cost to the taxpayer, or its impact on the deficit,” said McConnell in the letter. “So it would be a real challenge to promise any level of support or opposition sight-unseen.”
Some leading Democrats say they believe the Treasury Department already has the authority to use money from the rescue package for the carmakers. Frank is helping to craft legislation that would explicitly direct the department to spend the money. He said on “Face the Nation” that the legislation would restrict car companies from paying dividends and bonuses and provide additional oversight.
Automotive lobbyists and trade associations spent the weekend ramping up pressure on lawmakers to extend a lifeline. Parts suppliers and dealerships are pushing for the legislation as well. Bob McKenna, head of the Motor & Equipment Manufacturers Association, writes in a letter to Congress on Monday on behalf of roughly 100 suppliers that “the vehicle manufacturers and the supplier industry are interwoven.” The United Auto Workers have also been pushing for Congress to help carmakers pay for the rising costs of healthcare and pensions as part of any bailout.
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