What are the Democrats up to?
Contradicting news reports suggesting that a bipartisan group of senators had come up with a deal to offer loans to U.S. automakers, Democratic leaders of the House and Senate were adamant in a just-concluded press conference: No bailout for Detroit until automakers come up with a plan showing how government aid will put them on a path to survivability. Senate Majority Leader Harry Reid gave the carmakers a Dec. 2 deadline to present this plan and raised the possibility of a new session of Congress on Dec. 8 to review the new plan and possibly approve a rescue.
Reid and House Speaker Nancy Pelosi reiterated the words "viability" and "accountability" again and again, clearly mindful that public sentiment in the country is running strongly against yet another government handout. Reid made three separate references to the corporate jets the CEOs of Ford, G.M. and Chrysler had flown in to attend committee hearings this week.
"The executives of the auto companies have not been able to convince the American people that this bailout will be their last," said Reid.
Rep. Barney Frank, as is his wont, made the most pointed observation: The money that Congress authorized to bail out the financial industry has not been used for the purposes that it was intended for. The Democratic leadership refuses to repeat that mistake.
But immediately following that press conference, a very disappointed Sen. Carl Levin of Michigan announced that a bipartisan subset of senators had indeed come to an agreement that would use money already authorized from the Department of Energy for retooling the auto industry to build more fuel-efficient cars as a bridge loan to keep the Big Three going. Levin argued that if his proposal was put to a vote today, it would pass. But he conceded that the Democratic leadership had already declared no vote would happen today.
Earlier, Pelosi brushed off a question asking why the leadership was unwilling to use the funds already authorized by the Department of Energy. She noted instead that the White House had the authority to use TARP -- the Troubled Asset Relief Program -- to fund any immediate bridge loans, if it so desired.
So what's going on here? A game of chicken with the White House -- with Reid and Pelosi denying the application of Department of Energy funds and challenging the Bush administration to use TARP funds instead? Or can we take them at their word -- that enough is enough, and there will be no further government action until the auto industry CEOs, in Reid's words, "get their act together" and demonstrate that they have a real strategy for returning to sustainable profitability?
The only thing that seems clear at this moment is that the situation remains highly fluid.
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