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Video: Obama, Romney spar over $80B auto industry bailout

President Obama and Republican nominee Mitt Romney traded blows in their debate Tuesday night over the federal government’s bailout of the U.S. auto industry, with Romney accusing Obama of misstating his position on the $80 billion loans in 2008 and 2009.

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After taking criticism from liberal pundits for not mentioning the government assistance given to the auto industry in his first debate with Romney, Obama hit Romney over The New York Times op-ed he wrote in 2008 urging Washington to “Let Detroit Go Bankrupt” within the first 15 minutes of Tuesday's contest.

Romney pushed back quickly, saying Obama was misrepresenting his position on the auto bailouts, maintaining the president actually followed his advice about the car companies. 

“One thing that the president said, which I want to make sure that we understand, he said that I said we should take Detroit bankrupt. And that’s right. My plan was to have the company go through bankruptcy, like 7-Eleven did and Macy’s and Continental Airlines and come out stronger,” Romney said.

“And I know he keeps saying, you want to take Detroit bankrupt. Well, the president took Detroit bankrupt,” Romney continued. “You took General Motors bankrupt. You took Chrysler bankrupt. So when you say that I wanted to take the auto industry bankrupt, you actually did.”

Romney was responding to Obama's charge that Romney turned his back on the nation's auto industry and its workers. 

“[N]ow when Gov. Romney said we should let Detroit go bankrupt, I said we’re going to bet on American workers and the American auto industry and it’s come surging back," Obama said. 

“I want to do that in industries, not just in Detroit, but all across the country, and that means we change our tax code so we’re giving incentives to companies that are investing here in the United States and creating jobs here." 

Romney, speaking of the managed bankruptcies that were undertaken by the auto companies, countered that it's “important to know that that was a process that was necessary to get those companies back on their feet, so they could start hiring more people.”  

“That was precisely what I recommended and ultimately what happened,” Romney said.

The harsh exchange marked the first serve-and-volley between Obama and Romney on the auto bailouts after the president spent months criticizing him for the 2008 article, particularly in Midwestern swing states like Ohio.

Democrats also devoted much of their summer convention to arguing that Obama “saved” the U.S. auto industry, though the bailouts originally began under former President George W. Bush.

-This story was first posted at 9:25 p.m. and it was updated with new information at 9:45 p.m.

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