ABC News’ Z. Byron Wolf Reports from Capitol Hill: An architect of the original bailout bill said Thursday Democrats lack the votes to pass bill giving auto companies a piece of the $700 billion bailout pie next week.
"I want to help them if we can, but I’m not going to give anyone a blank check, so we’re going to try and do something if we can next week. I don’t think the votes are there. Candidly, I don’t think we have the votes to get that done. With no big change between now and next Wednesday, I’m skeptical," said Sen. Chris Dodd, D-Conn., who chairs the Senate Banking Committee.
Even after January, Democrats will have to gain some Republican support in the Senate to pass a new rescue package for the automakers — and that is looking less likely.
Republicans worry that every time Congress passes a rescue package for a new industry, others will line up to create a bailout soup kitchen line.
"Those are not illegitimate concerns obviously," said Dodd, "And you want to put conditions on any resources provided to an industry that hasn’t managed itself very well, but its not going to serve any of our interests if a major automobile manufacturer goes out of business between now and Jan. 20th if we could step in and keep them vibrant, we might allow them to survive."
So, while the aim and focus of the TARP is elastic and evolving, it is looking less likely that the auto industry will get in on the action.
Democrats in the House and Senate made clear earlier this week that they’d like to see some of the $700 billion go to help the troubled U.S. auto industry, which directly and indirectly employs 1 in 10 U.S. workers.
But, Republicans Thursday indicated they will be less willing to sign a big new check for Detroit than they were to prop up the financial industry earlier this year.
"People up here don’t get it," fumed one Senior Republican Thursday. "Bailouts are less popular than Congress."
Be it a rescue or a bailout, any new loans to the auto industry would represent another huge outlay of taxpayer dollars and that is what frustrates Republicans, when there are no taxpayer guarantees the new money would keep the auto industry solvent.
"Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers’ competitiveness around the world is neither fair to taxpayers nor sound fiscal policy," said House Republican Leader John Boehner in a statement Thursday.
And if Republicans band against a bailout for the auto industry, Democrats admit there is no way it can pass this year, and it might be tough next year too.
House Financial Services Committee Chairman Barney Frank, D-Mass., an architect of the $700 billion rescue package, is said to be crafting a sub-rescue package for the auto industry, which would cut a check from that $700 billion to the prop up the U.S. automakers. Frank’s committee will grill the CEOs of the Big Three American automakers in a hearing next week.
But, Congress authorized $25 billion in preferred loans to the auto industry earlier this fall. The money is tied up in red tape and must be used to update facilities for production of more fuel efficient vehicles.
Rather than dipping into the $700 billion originally aimed at Wall Street and the financial industry, Republicans would rather re-tool those loans to make them more immediately available and not constrict their use to creating more fuel efficient vehicles.
Mitch McConnell, the Republican leader in the Senate (and the most powerful Republican in the land when President Bush is no longer president) has not rejected the idea of a bailout for the auto industry.
But his spokesman Don Stewart said Thursday that Congress should consider how to use the billions in loans already thrown at the auto industry before allocating new money.
“Earlier this year, Congress acted in a bipartisan way to help the auto industry and protect jobs. The Congress passed and the president signed legislation authorizing $25 billion in low-interest loans to help American automakers re-tool their facilities to make the fuel-efficient cars of the future. It may be that there are changes that need to be made in order to expedite these low-interest loans. Other ideas have been floated and all will receive a review as we approach the Senate’s return next week," said Stewart.
Democrats realize that until January, when Barack Obama becomes President, they can’t get anything done without the cooperation of Republicans first in the Senate and ultimately in the White House, where President Bush is no fan of another bailout/rescue.