by Deb Cupples | Wednesday, the House passed a bill to lend U.S. automakers $14 billion. Senate Republicans have signaled that they would not support the House's bill -- but they may support a loan bill if the bill puts severe conditions on the United Autoworkers' Union. 'No surprise there.
The New York Times reports:
"[M]r. McConnell also held out slim hope for a compromise, suggesting that Republicans could rally around a set of proposals by Mr. Corker, the junior senator from Tennessee, who agreed that the bill did not set stiff enough requirements for the automakers.
"Under his plan, which was under intense negotiation with the Democrats, the automakers would be required by March 31 to slash their debt obligations by two-thirds — an enormous sum given that G.M. alone has more than $60 billion in outstanding debt.
"The automakers would also be required to cut wages and benefits to match the average hourly wage and benefits of Nissan, Toyota and Honda employees based in the United States, and the companies would have to impose equivalent work rules.
"In addition, the plan would bar any pay for idled workers other than “customary severance pay” — ending a program that the union had already agreed to curtail....
"But Mr. Corker and other Republicans had expressed deep dissatisfaction with the provisions in the bill requiring the auto czar to oversee sweeping reorganization plans by the companies without having the legal authority to require them to take specific steps." (NY Times)
How interesting that Senate Republicans -- who traditionally abhor the mere thought of government forcing private businesses to do anything -- are now calling for just that.
Yves at Naked Capitalism suspects that "the Senate is showing a bit of TARP backlash, that having been sold a bill of goods once, they are in no mood to sign a second blank check."
He's likely right -- to a point. Then again, only 15 of the Senate's 49 Republicans voted against the TARP (i.e., the $350 billion wall street bailout that will likely become a $700 billion bailout). See roll call vote.
In other words, about two-thirds of the Senate's Republicans voted for the anti-accountability, no-strings-attached bailout bill (TARP) back in October.
Among the Senate Republicans who supported TARP were Mitch McConnell (KY) and Bob Corker (TN).
It's more than a little ironic that Senators McConnell and Corker don't seem to be talking about forcing automakers to cut executive pay or management's wasteful spending (things like private jets for execs, condos for execs, premium seats at sporting events...).
It's tragically ironic that Senators McConnell and Corker have their knickers in a tourniquet-like twist over a $14 billion loan to automakers just a few months after they put their seal of approval on $350+ billion in loans to Wall Street firms.
The Wall Street bailout package is 25 times larger than the currently proposed automaker loans.
If one is going to shrug off one bailout package yet require strict accountability for another one, wouldn't it be wiser to insist on accountability for the $350 billion (possibly $700 billion) loan?
I don't know about Corker, but Sen. McConnell has been wheeling and dealing around Washington for nearly 25 years. He knows what's what, and he's not stupid. He wasn't stupid or naive back in October, when he voted to hand $350 billion in taxpayer money -- with no strings attached -- to Wall Street execs who had recklessly drivien their companies and our nation's economy into a ditch.
It's also interesting that Sen. Corker's plan (which Sen. McConnell seems to support) calls for lowering American autoworkers' pay to the same levels as workers of Honda's, Nissan's, Toyota's U.S. employees.
Speaking of Japanese automakers' plants in the U.S., Toyota has a huge plant in Kentucky, which happens to be Sen. McConnell's state.
European automaker Volkswagen is building a $1 billion plant in Tennessee, which happens to be Sen. Corker's state.
At first glance, it certainly seems that Senators McConnell and Corker -- or at least some of their corporate and individual constitute back home -- may have an interest in seeing America's auto industry crash and burn.
I mean, it just seems odd that both senators were so lax about regulating Wall Street firms that took $350+ billion in taxpayer money but later waxed hard-nosed when it came to lending $14 billion to U.S. car companies.
Update: It seems that Senators McConnell and Corker got their way: the Senate has reportedly stopped considering the auto industry bailout bill.
Here's what this tells us: that two Senators out of 50 (i.e., McConnell and Corker) likely could have stopped the $350 billion Tarp bill (i.e., the strings-free bailout for reckless Wall Street firms) had they wanted to stop it.
Apparenlty, these two senators had the power to throw up obstacles -- and maybe could have forced the rest of Congress to insist on including accountability provisions in the Wall Street bailout.
Obviously, Sens. McConnell and Corker failed (or refused) to do that.
Memeorandum has commentary.
Other Buck Naked Politics Posts:
* Cutting Executive Pay Would Save Jobs
* NY Times Admits U.S. Autoworkers' Salary Figure is Wrong
* Dodd Wants GM CEO to Step Down as Bailout Condition...
* Lehman Execs Redistribute Shareholder Wealth (to Themselves)
* Execs Made Millions While Driving Companies into Ditch
* Someone Please Take the Economy Away from Mr. Paulson (Pt 2)
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