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November 20th, 2008

(Update2) Dems Reject Tentative Bailout Compromise



Democratic Congressional leaders — Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi — say the tentative compromise proposed by four bipartisan auto-group senators will not pass until the Big Three present a detailed proposal of how government funding will be spent:

“Until they show us the plan, we cannot show them the money,” Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol.

Pelosi and Reid commented that lawmakers would reconvene in early December to discuss the legislation if GM, Ford, and Chrysler constructed and presented appropriate plans.

The Detroit Free Press reported this afternoon that a tentative agreement was reached to allow the Big Three to immediately utilize the $25 billion originally set aside for development of more fuel-efficient vehicles. That plan was supported by both Republican lawmakers and the White House. The agreement makes sense since the cash has already been set aside for the purpose of aiding the American auto industry, just not in this way or time.

The tentative agreement proposed by the auto-group senators came after lawmakers shot down the idea of devoting an additional $25 billion from the $700 billion financial assistance (TARP) plan — a plan still supported by Democrats. Lawmakers have assured us that “Automakers would face strict conditions on using the money, similar to what financial firms faced under their bailout, and as they repaid the loans, the money would go back into the retooling fund” — and we all know how well that’s going.

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