First lady makes Obama's case on auto bailouts in campaign speech

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The $80 billion that was loaned to General Motors and Chrysler in a series of controversial bailouts that began under former President George W. Bush and continued under President Obama has always been a political issue. But with Mitt Romney now the presumptive Republican nominee to challenge Obama this fall, the issue has remained near the forefront of the 2012 campaign.

Democrats have attacked Romney since he was in the heat of the Republican primary for criticizing the federal government giving loans to General Motors and Chrysler when they were on the verge of bankruptcy during the economic panic of 2008.

Critics of the bailouts note the United States is unlikely to recover its outstanding $1.9 billion investment in Chrysler and its investments in GM beyond the $6.7 billion loan it gave the company, but that has not stopped Democrats from hammering Romney.

The Democratic weapon of choice in the auto bailout attack is a 2008 op-ed Romney wrote in The New York Times titled "Let Detroit Go Bankrupt." In it, Romney said giving the auto companies financial assistance in 2008 would be worse for them than allowing them to go bankrupt.

“If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye,” Romney wrote in the article. “It won’t go overnight, but its demise will be virtually guaranteed.”

Romney has argued since that he was calling for a managed bankruptcy for the auto companies, and one of his top advisers said recently that the bailouts were actually the former Massachusetts governor's idea.

"The fact that the auto companies today are profitable is because they've shed costs," senior Romney aide Eric Fehrnstrom said last weekend. "The reason they shed those costs and have got their employee labor contracts less expensive is because they went through that managed bankruptcy process. It is exactly what Mitt Romney told them to do."

Obama's reelection campaign does not agree, and the first lady said Tuesday that it was because of the incumbent president that "the auto industry is back on its feet again, and more importantly, people are back to work providing for their families again."