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White House: no action on auto bailout while Bush in Iraq
2008-12-14
WASHINGTON (AFP) - President George W. Bush will hold off on any action to inject billions of dollars into beleaguered US automakers until he returns from a surprise visit to Iraq, the White House said Sunday. Leaving auto workers in limbo for at least another day, the announcement comes after the Bush administration signaled it would consider tapping into the massive 700-billion-dollar bailout fund for financial services to help General Motors, Ford and Chrysler. A 14-billion-dollar plan to help tide the carmakers through until March with government-backed short-term loans failed in the Senate on Thursday. Spokeswoman Dana Perino told reporters aboard the president's plane as he flew to Baghdad that she "can't imagine" there will be any movement on aid for the automakers while Bush is in Iraq. "I don't anticipate anything before we return," Perino said. The White House has not said when Bush is due back in Washington. GM has warned it will run out of cash by the end of December without intervention, and the company has advisors to consider options that include bankruptcy. On Friday GM announced it was idling 30 percent of its North American production "in response to rapidly deteriorating market conditions." Chrysler and Ford have also asked for federal aid to stay afloat. For months Bush had refused to use money from the 700-billion-dollar Troubled Asset Relief Program (TARP) -- originally created to help financial services firms -- to help the auto industry. The measure hammered out in Congress would have required the manufacturing giants to engage in painful restructuring to ensure their long-term survival, as well as a plan to repay the government loan, or face bankruptcy proceedings. The House of Representatives passed the bill on Wednesday, but the measure collapsed in the Senate on opposition from Republicans who blamed labor unions for refusing to accept cuts in wages and benefits. Senator Bob Corker, a Republican from Tennessee, said Sunday that the White House was now considering other ways to get rescue funds to the automakers. "It's my understanding that Treasury officials are actually going through the balance sheets of the companies, talking with them about where they are," Corker told Fox News Sunday. The Republican approach Corker presented as an alternative to the Democratic-supported bill would set up a process similar to court-mandated bankruptcy for the automakers to restructure, and demand steep pay cuts from United Auto Workers union members. UAW president Ron Gettelfinger, speaking Sunday on CNN, said some Republicans were determined to sink any auto industry rescue plan. "This legislation should have passed," he said, noting that the measure passed in the House and it was endorsed by the Republican president. "No matter what would have happened in Washington, I am convinced ... that the Republicans would have found a reason to knock it down," he said. Gettelfinger also said that his union representatives have "not entered into any discussions with the administration at this point." Pennsylvania Democratic Senator Bob Casey on CNN dismissed as "ridiculous" the Republican notion that union inflexibility is the reason the bill failed. "To a large extent there's been a lot of scapegoating here," Casey said, noting that the UAW has already "provided all kinds of concessions the last couple of years" and were willing to do more. Democratic Senator Debbie Stabenow, whose state of Michigan is home to the embattled auto companies, said the US government must step in. "Every other country in the world that has an automaker presence is stepping up to help them get through that because they know it's critical to their economy, it's critical to jobs, and it's critical to their national defense," she said on Fox. "So far, we're the only ones in America that have not understood that and stepped up." President-elect Barack Obama, who takes office January 20, urged the White House and Congress to "find a way" to provide urgent aid while forcing "the long-term restructuring that is absolutely required." The Treasury Department "will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry," Treasury spokeswoman Brookly McLaughlin said Friday. Congress is due back January 6.
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