Congress is back in session again, this time dealing not with the $700 billion TARP bailout program for the floundering financial markets, but rather with a $25 billion bill that will essentially bailout the fast-sinking automotive market, where things have gone from bad to worse as the economy tanked two months ago.
But the money that Congress is allotting to the three automakers comes with many a provision and a check: it bars the companies from giving bonuses to employees who make over $200,000 per year, and it would also create a government oversight board to make sure that the companies are using the money to get their businesses back on track, as opposed to going on $450,000 spa vacations.
Many democrats are backing the plan, but with only 51 seats in the Senate, things will be slow-going for the lefties, who are now facing extreme criticism and opposition from fellow republicans, including President Bush and his cabinet members, who say that taking money out of the TARP program will create a “slippery slope.” They suggest taking money from a Department of Energy loan program, which will help Detroit develop cleaner technology and (hopefully) alternative energies that can possibly jumpstart the failing automotive industry in America.
Another bill is going through Congress at the same time, this one being a $6 billion bill that would extend unemployment benefits for another 13 weeks; however, few are against this bill.
Henry Paulson, Secretary of the Treasury, and Ben Bernanke, Federal Reserve Chairman, are meeting with Nancy Pelosi this week to discuss their options concerning the bailout. No matter how things turn out, you can expect to see the Democrats take a hard stance against changing their bill, arguing that should they change it, it would make it more difficult for the auto companies to survive in an ever growing and ever changing market.
Richard Shelby, one of the most vocal opponents to the bill, has stated that “the management has got to go,” referencing the government. “If you deal with the people who brought the failure to these companies and keep them in office, keep them in power, with federal money, you’re just going to have more of the same problem and nothing is going to happen, except just the downward spiral.” Democrats, on the other hand, are keen on proving republicans wrong by showing them that the bill can work and that Detroit will function again.
Any way you look at it, things are only going to get worse before they get better. A budgetary management office – overseen by the government – can be a good thing, but it can also wreak disaster on Detroit, especially if things go incredibly wrong. With $25 billion at stake, we can’t afford to have big business running amok with the money, but we can’t let Congress do the same thing either. Hopefully, everything works out well: Detroit is saved, government is saved, and we all start buying American again.