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So What Happened?

The car bailout went down to defeat last night when the Democrats lost a cloture vote to move forward to vote on the bailout bill which has passed the House. The New York Times explains: “The collapse came after bipartisan talks on the auto rescue broke down over GOP demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese carmakers.” It was not even close — 52 to 35, well short of the 60 votes needed. (Democrats Blanche Lincoln and Jon Tester joined the Republicans.)

It was, by any measure, a stunning defeat for the Democrats – and more so for their Big Labor ally, the UAW. The UAW is now revealed as unwilling to make concessions needed to save their own members’ jobs, even in the face of a looming recession. It is not a move likely to endear them to anyone, even those sympathetic to the notion that the government should “do something” to help save the Big Three. Sen. Bob Corker had tried to forge a last minute deal which would have forced the Big Three to cut debt obligations and promptly align their labor costs with foreign-owned domestic manufacturers. In the words of a Republican aide: “Corker tried to get a deal, but the UAW didn’t want to budge on wages within the next year, and many Republicans remained skeptical of the whole bill.”

This suggests that the Republicans, when riled up by truly awful legislation, can hold firm. Once again the wily fox of the Senate, Mitch McConnell, stopped a Democratic runaway train. And it shows that Big Labor can’t always bully its way into a deal (in this case, one that would have absolved them from responsibility to participate in a timely fashion in a taxpayer rescue of the industry they helped cripple.) In retrospect, it was misguided for the White House and Democrats to try to craft a deal without the Republicans. And certainly Corker’s savvy work in the hearings, and preparation of an alternative bill, gave Republicans cover to vote against what was perceived as another ill-advised give-away of billions in taxpayer funds.

The lesson here for Republicans is that if they stick together (even with reduced numbers in the new Congress), they might still force the Obama administration to trim its sails occasionally. That is good news for those rooting for a measure of fiscal sanity. Perhaps the Republicans have finally discovered that good policy, when coupled with some unflinching political gamesmanship, can pay benefits. For now, chalk one up for the Republicans — who, since November 4, have enjoyed quite a run of good fortune.


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