If you were expecting the Republicans to take a stand against government intervention in the auto industry, I hate to inform you but don't hold your breath.
The New York Times:
But Senator Bob Corker, Republican of Tennessee, who sharply questioned executives of Detroit’s Big Three auto companies at a hearing on Thursday, said he was unhappy with the way the plan seemed to be shaping up on the Senate banking committee.
“Based on the outline we’ve seen so far, we are disappointed,” Mr. Corker said in a statement. He reiterated his demands that the automakers make aggressive efforts to cut labor costs and reduce their overall debt obligations before receiving any aid.
“These are the same types of conditions a bankruptcy judge might require to ensure that these companies become viable and sustainable into the future,” Mr. Corker said. “And if they will agree to these terms, then we have something to talk about.”
The Republican leader, Senator Mitch McConnell of Kentucky, said he would be looking for strong taxpayer protections.
“I look forward to reviewing the legislation being drafted to address the difficulties in our auto markets,” Mr. McConnell said in a statement. “As we consider this legislation, our first priority must be to protect the hard-earned money of the American taxpayer.”
Except for Senator Shelby from Alabama and few other fiscal hawks, it appears that the bailout will move forward - some version of it anyway - with the support of the GOP.
The Wall Street Journal shows why this is an awful idea:
The car makers' request for a bridge loan, by contrast, looks like a $34 billion bridge to nowhere. It has already morphed into an opportunity for political extortion -- and we don't even have a bill yet. When, in a couple years, costs have not come down as expected because of political pressure to keep the unions happy and the green cars aren't selling -- because they were designed in Washington, not for consumers -- the companies will be back for more money.
The bailout commitment, in other words, is effectively open-ended, no matter what anyone says. And with the feds so invested in the companies, it will only be a short step for Congress to begin to coerce consumers to buy the cars that Washington prefers. Mr. Friedman, the concerned scientist, is already planning for that day. He said Friday that we'll eventually have to impose a "fee" (read: tax) on cars that "pollute too much" or use "too much gas."
This fairy tale, in other words, does not end happily ever after. A bankruptcy, prepackaged or otherwise, keeps looking better.
The Journal says that in effect and for all practical purposes, if this bailout goes through the way it is being presented by Democrats, the government will own the auto companies. Not their assets and liabilities but their business plan. Uncle Sam is going to force the car makers to "go green" by offering models with excellent gas mileage - that consumers have shown they won't buy. This is what the WSJ is talking about when they write of an "open ended" commitment. Whatever number Congress comes up with today will be a drop in the bucket to what they will keep pumping into the industry to keep it afloat.
This is the GOP turnaround? Perhaps they should turnaround and go home.