Automakers likely to be bailed out
The stars are aligned for the big three automakers because everyone is coming out in their favor. First, we heard that they were meeting with congressional leaders on Capitol Hill. Then, we heard that Rahm Emanuel, a house democrat and Barack Obama’s future Chief of Staff, favored a bailout. Next it was Barack Obama and Nancy Pelosi’s turn to get behind this one. According to the Guardian, now, apparently even, George W. Bush is getting in line with the Bailout Nation crew.
Get ready for some serious deficit spending.
The shifting balance of power in Washington was graphically illustrated today when Barack Obama wrung his first concession from George Bush over the troubled car industry.
During an hour-long meeting with President Bush in the White House on Monday, the president-elect had made a plea for a multi-billion dollar bail-out for the country’s three struggling car manufacturers, Chrysler, General Motors and Ford.
It was the first test of wills between Obama, who as a Democrat instinctively favours intervention, and Bush, who is still ideologically resistant to using federal funds to prop up private companies. Although Bush was forced to agree to a $700bn (£454bn) rescue package for the banking, insurance and mortgage industries, he has so far drawn a line at the car companies.
The first signs of a softening of Bush’s position came today at the daily White House briefing, less than 24 hours after he saw Obama, White House spokesman, Tony Fratto, indicated that Bush was prepared to consider a $25bn loan that the Democrat-controlled Congress is to put forward next week. The loans to the big three car companies would be tied to the industry switching to more fuel-efficient standards.
“We’re open to ideas from Congress to accelerate funds they’ve already appropriated in the auto loan programme — as long as funding will continue to go to viable firms and with strong taxpayer protections,” Fratto said. Bush, in return for not vetoing the bill, is to seek a concession from Congress — approval of a long-stalled trade pact with Colombia.
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