If all goes according to plan, the House of Representatives will vote on a proposed Big Three bailout bill today:
The White House and congressional Democrats yesterday reached an “agreement in concept” on a plan that would throw a government lifeline to the faltering Detroit auto industry but require the auto giants, their workers and creditors to quickly negotiate a path to profitability or face the prospect of bankruptcy.
The agreement, which is set for a vote in the House today, calls for the government to speed $15 billion in emergency loans to the car companies as soon as next week, and for President Bush to immediately name a car czar to oversee the bailout. The companies would be required by March 31 to cut costs, restructure debt and obtain concessions from labor sufficient to report a “positive net present value,” according to a senior administration official, speaking on condition of anonymity because final language was still under discussion.
If the firms failed to make progress toward that goal, the agreement would require the car czar to revoke the loans and develop a new plan that could include the option of seeking Chapter 11 bankruptcy protection, the official said. If the companies could not agree on steps to guarantee their long-term survival, they would be denied additional federal assistance.
The official said the agreement would create “three very serious sticks to ensure that this is truly what it was intended to be: bridge financing for firms that have a plan and a path to become competitive,” rather than becoming “the first in a number of interminable loans that these guys can get to avoid making the hard choices.”
The agreement cedes to the Bush administration its central demand that the auto giants move quickly to make changes in their operations or risk losing the government cash they need to stay in business. It also ensures that the car companies would be held to a tough standard after President-elect Barack Obama takes office.
Last night, the agreement was still being drafted into legislation. But the official said “there’s an agreement on the concept and the way forward, and we’re hoping to accomplish that as quickly as possible.”
In the House, Democratic leaders were racing to make arrangements to bring the measure to a vote. With ambivalence toward another bailout running high among the public and many rank-and-file Democrats, House leaders arranged an “issues forum” yesterday in which Democratic lawmakers were able to ask questions about the proposal.
Absent a repeat of the House Republican rebellion that led to a first round defeat for the financial industry bailout back in September, it appears that the package will pass the House.
Which means that the real battle will be in the Senate, where the prospects aren’t looking good at all.
Alabama Senator Richard Shelby has already said he would filibuster the bailout bill if it gets to the Senate, and he’s not alone. As Kim Priestap notes, Nevada Senator John Ensign seems to be leaning toward joining Shelby:
Nevada Senator John Ensign says he may try to block the Senate from passing a bailout for the auto industry. Ensign calls the plan a move towards socializing the economy. The Senator also pointed out that other industries are suffering, including hotel and gaming, yet are not asking for a bailout. According to Ensign, “You’re going to see a lot of hotels are going to be closing their doors. There’s probably going to be some in Nevada and some across the country, and where do we stop at this?”
And, South Carolina Senator Jim DeMint is leaning in that direction as well:
“Ensign is exactly right. This bailout will hurt taxpayers, it won’t help the economy, and it will prevent these car companies from becoming competitive. The only way for the automakers to survive is a complete restructuring that allows them to break free from the stranglehold of union bosses. If Senator Ensign insists on debate on this legislation, I’ll fully support him.”
All of this poses problems for the bill’s viability in Congress’s upper house:
Senate Majority Leader Harry M. Reid (D-Nev.) acknowledged the brewing battle in remarks on the Senate floor, but vowed to press ahead, even if it means keeping senators in Washington through the weekend. “We’re going to have a vote on this sometime. We can either have it sooner or we can have it later,” Reid said. “We cannot let a few people stop us from doing the people’s business.”
Because Obama has resigned his seat, Democrats have at best a 50-to-49 edge in the Senate until new members take office next month. It was unclear yesterday whether Obama’s vice president-elect, Sen. Joseph R. Biden Jr. (D-Del.), would cast a vote on the auto bill, meaning Democrats may need as many as 11 GOP votes to prevail over filibuster threats. A spokesman for Obama’s pick for secretary of state, Sen. Hillary Rodham Clinton (D-N.Y.), said she would be available for the vote.
Get ready for a big fight on this one. Hopefully the good guys will win this time.
