WASHINGTON (Nov. 20, 2008) — House and Senate Democratic leaders sidetracked a bipartisan group of senators who floated a compromise proposal to help the ailing U.S. auto industry.
Rather than give Detroit's Big Three auto makers $25 billion out of the $700 billion bailout for the financial services industry, the compromise proposal was intended to make available immediately the $25 billion Detroit was supposed to receive over time to develop fuel-efficient and alternative energy vehicles. Sens. Carl Levin, D-Mich., and Kit Bond, R-Mo., and Rep. Debbie Stabenow, D-Mich., had promised to reveal further details of the compromise later in the day Nov. 20.
Before they could do so, however, Senate Majority Leader Harry Reid, D-Nev., and House Speaker Nancy Pelosi, D-Calif., announced they would not allow the compromise to proceed.
Reid and Pelosi said the chief executives of the Detroit 3 had failed to persuade them that a $25 billion loan would make the companies viable again. They asked the auto makers to submit plans by Dec. 2 to show how they would use the money, and said they would insist on accountability.
The dramatic twists and turns in the auto industry aid saga occurred just as Scott Paul, executive director of the Alliance for American Manufacturing, said during a telephone news conference that passage of an auto industry aid package was crucial to the U.S. economy.
"The choice is simple — either a $25 billion loan that would be repaid right now, or a $100 billion to $150 billion cost to the economy down the road," Paul said. Plant closings, layoffs, disruptions to the U.S. supply chain and the federal government having to take over millions of pension plans for laid-off workers are among the disasters that would result from government failure to help, he said.
Founded in 2007, the AAM is an alliance between the United Steelworkers and a group of major U.S. manufacturers devoted to finding and promoting creative solutions to issues of common concern. These issues include international trade, health care, energy and retirement security, and currency manipulation, according to the AAM Web site.