The Auto Bailout, ‘Demagoguing’ the Budget Fight, and Congressional Consultations on Libya: Today’s Q’s for O’s WH – 6/1/2011

Jun 1, 2011 3:26pm

Assistant to the President for manufacturing policy Ron Bloom joined us at the start of the briefing to discuss the president’s efforts to save the American Auto industry.

TAPPER: What money do we still – do the taxpayers still have invested in these companies and at what point will that be repaid, if  ever? 

BLOOM:  The total funds invested, including the prior administration, into the industry is roughly $80 billion.  Roughly $40 billion has been returned to date.  The remaining money is accounted for by stakes in General Motors – we've sold about half of what we own, but we still own the other half; a small equity stake in Chrysler; and a stake in Ally Financial, which is the old General Motors Acceptance Corporation.  How those stakes are realized is not yet determined. 

We are – as we have said repeatedly – we are determined to exit those stakes as soon as practical.  And so what they fetch in the market will determine, you know, the full accounting of the remainder of the money.

TAPPER:  So just to translate that, the moment that they're worth what we paid for in terms of stock equity, that's when we will then sell it?

BLOOM:  Well, no.  No, I don't think we have a particular target price, because the president has made clear that he does not believe that is the proper role of government in the long term to be an owner of a private corporation.  And so we do not view ourselves as kind of market timing looking for the absolute best opportunity to sell.

So we have tried to walk a fine line.  We said, we're not selling as soon as possible, meaning we're not going to sell at a fire sale the first day we can.  On the other hand, we're not holding, waiting for a target price.

So we will look to exit these things as soon as practical, and the price that they fetch in the market will the price – will be the price that they fetch.  We have – we report periodically, and other oversight agencies report periodically, looking at the value of those stakes.  And as as we've pointed out, the loss, if you will, that's been reported – that had been recorded early, has come down substantially.  The latest number from the CBO, I think, was a $14 billion loss, and that reflects market prices at the time they did it. The final number will be the final number.

And look, there is no – there is no joy in having to announce or – we're not announcing anything today, but in recognizing that all of this money will not be returned.  On the other hand, as we record what was lost, we need to also record what was saved.  External experts have stated that over a million jobs were saved by the president's actions, and other people have numbers substantially higher than that. The impact of the collapse of GM and Chrysler would not have been just the couple hundred thousand people who work at these companies.

Three times as many people work in the supply base.  Another three times as many work in the suppliers, to say nothing of all the pizza parlors and all the dry cleaners and all the other people in these communities.

So while we are obviously extremely conscious of our obligation to get every penny we can for the taxpayer, we're also not going to apologize for the fact that there are literally hundreds and hundreds of thousands of Americans who are working today for what – because of what happened, and that the – and that when the final accounting occurs, we're quite confident it's going to be a far smaller number than people predicted at the time we did it. 

(LATER)

TAPPER:  Congressman Ryan in the meeting today, according to attendees and according to Ryan at the stakeout following, made the point that the president, that – as Ben mentioned, demagoguing the Ryan plan for Medicare is not helpful to this process.  And while I understand that the president doesn't believe that he has done so, does he think that the Democratic party has done so? Does he – has he seen the ads showing a Paul Ryan lookalike pushing grandma off a cliff?  Has he seen any of these ways Democrats are using the Ryan plan to win elections and score political points, and does he have any issue with that?

CARNEY:  I don't know what ads he may or may not have seen, Jake.  What I will say is that the substantive differences over Medicare are real.  And the facts about whatever you call the system that is in the House Republican proposal, premium support or privatization or voucherization of the program, it has the impact of shifting the cost burden, forever-growing medical costs, onto beneficiaries in large, large numbers – $6,400 per senior.

That's just an inescapable fact.  And our argument is, you don't need to do that.  You can find savings in Medicare and entitlements that the president has already through the Affordable Care Act and as he has proposed further in his future-oriented proposal.  And you can get waste, fraud and abuse, and you can reduce the cost of medical care while still protecting our seniors.  That's what he believes we have to do.

And one of the fundamental problems – and, I think, why people around the country have reacted poorly to the Republican proposal – is that it not only eliminates or changes the Medicare program to the point where it is no longer the program we know and does not provide the guarantees that it used to, but it does so in part in order to fund tax cuts for wealthy Americans who have already benefited significantly at a time when the middle class and others have been squeezed so tightly.  So those are just – that's an assessment of priorities.

GLENN THRUSH, POLITICO:  Have you seen grandma going over the cliff, Jay?

CARNEY:  I haven't, no.

TAPPER:  Is that – I understand there is a philosophical – legitimate philosophical difference.  The president has – is it –

CARNEY:  Look, the president fundamentally believes that it does not – that we need a bipartisan solution, that we need to work together and find common ground.

TAPPER:  So does his party running ads showing Paul Ryan pushing Grandma over a cliff help that bipartisan –

CARNEY:  I think that the decisions and negotiations that will produce a result and demonstrate this president's commitment to significant deficit reduction as well as Democrats in Congress and Republicans in Congress occur in the – occurred here in Washington.  And the fact is that we can achieve that in a way that the American people can feel that each side moved off its starting position, accepted that it wasn't going to get 100 percent of what it wanted, that no absolutist positions prevail in Washington; that's the nature of our system.

And he feels that he has demonstrated his commitment to that, his commitment to taking positions that often are at odds with members of his own party, repeatedly.  And he's been willing to so that in the past and he's willing to do that in the future, because he's committed to finding solutions that work for the American people.

TAPPER:  So should the Democratic Party stop –

CARNEY: I think I’ve answered the question -

TAPPER:  You haven't answered the question.  You've said that the president is conducting himself in an appropriate way, but you haven't addressed the question of whether or not his party is.

CARNEY:  You're asking if there's been a negative reaction to aspects of the Republican plan.  I think it's because of the incontrovertible – incontrovertible facts about what's in the plan, you know.  And our opposition to those elements of the House Republican proposal have – you know, we have not at all papered over.

But we're not doing – I mean, we're not – we are interested in bipartisan compromise.  This president has made that clear again and again, and he's – and he's walked the walk, not just talked the talk, when it comes to making those tough choices.  And he's shown his willingness to do that.

TAPPER:  Can I ask a question about Libya?

CARNEY:  Yes – though let’s let others get a chance.

TAPPER:  Sorry.  The question is that there's a resolution being offered by Congressman Dennis Kucinich that would stop U.S. and military intervention in Libya.  And there are House Democrats and House Republican leaders who are concerned that it actually could pass because there are enough House Republicans who are frustrated with the consultation process and what's going on.  Is the White House aware of this? Is the White House doing anything about it?  Is it concerned?

CARNEY:  Well, we're obviously aware of what happens on Capitol Hill, and are aware of this in particular.  But as I've said before, we feel strongly that the president has acted in a way that is consistent with the War Powers Resolution.  He looks forward to and would be happy with support, demonstrations of support by Congress and – similar to the Kerry-McCain proposal that has been put forward – and, you know, will await to see whatever action Congress takes.

In the meanwhile – in the meantime, we are – we welcome the announcement today by NATO that it will extend its mission in Libya for 90 days.  We feel that mission has been successful thus far and – in protecting – in its mandate of protecting Libyans from attacks by the Gadhafi regime.  And we continue to participate in that mission.

-Jake Tapper

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