CQ Today: House Passes Automakers Rescue
By Joseph J. Schatz and Alan K. Ota
The House comfortably passed a $14 billion emergency loan package late Wednesday aimed at keeping the Big Three automakers in business, but the package’s future was in flux amid stiff resistance from Senate Republicans.
Just more than two months after Congress approved a hard-fought $700 billion financial industry bailout, the auto industry rescue (HR 7321) almost certainly faces lengthy debate and procedural votes in the Senate. It remained unclear late Wednesday whether Senate leaders would amend the bill — which took slightly different forms in the House and Senate — or be able to garner the 60 votes necessary to limit debate and clear the package.
If opponents use all of the procedural options available to them, work on the bill could stretch through the weekend and into the week of Dec. 15.
House Speaker Nancy Pelosi, D-Calif., said she was hopeful that the Senate would embrace the plan negotiated between the White House and congressional Democrats. “We passed a bill that we voted on and everyone seemed to agree to. If they change it, then we will make changes,” she said.
While many House members planned to return home after the House floor vote, Pelosi said she could summon them back to Washington if the Senate moves on a revised version of the bill.
“We can come back anytime. But we don’t want to,” she said.
The 237-170 vote in the House put pressure on Senate Republicans to follow suit or bear the blame if the legislation fails. But the White House appeared to have little backing from members of its own party.
A lobbying effort by President Bush’s chief of staff, Joshua B. Bolten, fell flat. After emerging from a GOP caucus meeting with Bolten, Bob Corker, R-Tenn., said the administration made a “very non-compelling presentation.” He said that “they probably left with less support” than they came in with.
“There’s less than a handful of votes in there” for the compromise, said Corker, who is drafting a substitute plan he hopes to offer on the Senate floor.
Five conservative GOP senators said they would try to slow the bill. “A lot of us are prepared to talk about this bill to explain its merits and demerits” on the floor, said Richard C. Shelby of Alabama.
At least one GOP moderate expressed skepticism as well. Susan Collins of Maine said that she was not convinced that a prepackaged bankruptcy filing “might not be a better approach” and that “she is still looking at the issue.”
Minority Leader Mitch McConnell, R Ky., said that he “can’t handicap . . . the support within the conference” for the White House deal or the alternatives.
Senate Republicans seem divided over how best to approach the loan program, with some pushing for more powerful government oversight, while many others press for less government micromanagement of private industry.
The situation was a role reversal from the debate over the $700 billion financial industry bailout (PL 110-343) that passed in October, which had hardly any limits on how the money could be spent. Senate Republicans, including McConnell, gave strong support to that bailout after it was initially defeated by the House.
On the House floor Wednesday night, Financial Services Chairman Barney Frank, D-Mass., sought to put the onus on Republicans — and, seemingly, highlight Bush’s lack of influence — by noting that the parameters of the legislation “were largely dictated by the president of the United States.”
But McConnell refused to state his own position, saying, “I’ve not made a final decision” on what plan to support. Majority Leader Harry Reid, D-Nev., filed cloture Wednesday on the motion to proceed to a tax bill (HR 7005), which will serve as a shell for the auto bailout bill.
The bill would direct the president to choose one or more administrators from the executive branch who would be authorized to disburse up to $14 billion in bridge loans to the Big Three automakers. The administrators would bring together auto companies, unions, creditors and other players to negotiate long-term restructuring plans, which automakers would have to submit by March 31 — or 30 days later, if given an extension.
If the administrators have not approved a company’s plan by the deadline, the company’s loans would be recalled immediately — a provision that was made more stringent over the course of the negotiations due to GOP insistence that the bill’s oversight be strengthened.
Under a provision modified Tuesday night, firms accessing loans would have to submit any planned investment or transaction of $100 million or more to the administrators for review, and the administrators would have the power to prohibit the action. The provision was aimed at preventing the firms from using federal money to move operations to other countries.
Corker argued that the administrators of the program would not have any real power. The substitute amendment he is preparing would require that companies receiving loans reduce their debt obligations by at least two-thirds and bring their labor costs and work rules in line with those of Japanese-owned automakers.
Corker’s state is home to a Nissan auto plant. If these and other requirements were not met, they would be forced to file for bankruptcy under Chapter 11.
Democrats struggling to round up 60 votes to move an auto loan bill in the Senate are already short one vote because President-elect Barack Obama resigned his seat last month, leaving Democrats with just a 50-49 edge.
Reid said Vice President-elect Joseph R. Biden Jr., D-Del., who remains a senator, is prepared to vote if needed.
To a lesser extent, unified Democratic support for the package was also a question mark, as Finance Chairman Max Baucus, D-Mont., expressed opposition to a tax provision that would rescue the nation’s public transit agencies from defaulting on billions of dollars in financing agreements.
The bill passed by the House would not, as Democrats had wanted, require the automakers to drop lawsuits challenging California’s tough emission standards. A version released Wednesday by Senate Banking Chairman Christopher J. Dodd, D-Conn., had a notable difference from the House bill: The House bill would force an acceleration of the loan payback if automakers fail to comply with any federal or state fuel efficiency or emissions standards, while the Senate bill would apply those conditions only to federal standards.
The package includes a new provision designed to protect the automakers’ ability to take a tax write-off for past losses even if the companies are sold, despite IRS restrictions on the practice.
House Minority Leader John A. Boehner, R-Ohio, outlined a GOP alternative that would force the auto industry to restructure faster, require the United Auto Workers union to make more concessions and substitute government-backed insurance for a taxpayer loan to the industry.