Commentary Magazine


What Are They Driving At?

What’s really going on with the auto bailout? The Big Three are making their case, and Sen. Chris Dodd seems to have the task of rounding up votes. But votes for what? And are the votes even there?

An GOP Senate aide told me that things don’t seem any more clear than they did the first time the Big Three came to town, with Reps. Pelosi and Hoyer issuing conflicting statements earlier this week. The aide noted: “Hoyer said the House won’t bother even scheduling votes unless some deal is reached but Pelosi said she’s certain something will happen.” And in the Senate, the aide observes, Harry Reid is telling the press “he doesn’t think the votes are there to carve a bailout from the Treasury rescue funds, even though he still seems like he’s planning to have the Senate in session Monday.”

So the bottom line, he explains:

The reality is, though, no legislation exists, so it’s hard to know what is going to happen. Sen. [Mitch] McConnell noted last month that the only thing that has a chance of being signed into law is something like the Bond-Levin proposal that would use the existing $25 billion the auto companies have for conversion to renewable energy sources for a rescue plan. Democrat leaders don’t seem to be interested in that at the moment.

And why isn’t the President-elect pressing harder for a deal, if he thinks it’s so vital to save the auto industry from its own malfeasance? Aside from the fact that it’s a vote he might lose, it’s not clear whether the environmentalists or the labor lobby have the upper hand. The AP reports:

The United Auto Workers, along with Detroit’s Big Three, are pushing for an infusion of emergency loans for the carmakers’ immediate needs — even if that means diverting $25 billion that had been set aside for creating cleaner vehicles. Environmentalists balk at that notion, saying the money is sacrosanct and insisting that any new help be tied to strict requirements for greener cars.

The intramural fight helps explain why President-elect Barack Obama has stayed vague on his views on the details of the bailout and Democratic leaders have seemed uncertain about whether to push one through. It’s also at the heart of the disagreement between Democrats and the Bush administration over how to structure any carmaker rescue.

. . .

Environmental groups have long criticized the auto makers for focusing on gas-guzzling sport utility vehicles and pickup trucks, which yield higher profit margins, at the expense of a shift to smaller, greener vehicles. Now they say proponents of a bailout are asking Congress and taxpayers to put aside the very environmental advances that could make the U.S. auto industry competitive in order to put a financial Band-Aid on three badly injured businesses.

So for now there are a lot of speeches and there may even be a vote–if they can craft legislation that the Democratic interest groups can all live with. But for now the Democrats and the President-elect haven’t figured out what, if anything, they can do–especially in the face of public opinion strongly opposing a bailout. And the Republicans are watching with a certain amount of glee. It’s a scene you can expect to be played out again and again in the next few years.