GOP stings Bush for auto bailout

The White House’s action Friday to bail out the U.S. auto industry angered Republicans and immediately prompted a new fight over conditions on worker pay.

Congressional Republicans lambasted the president for providing $17.4 billion in loans from the $700 billion Congress allocated in October for the Troubled Assets Relief Program (TARP).

{mosads}They said Bush had thwarted the will of Congress, opened the door to government aid to other industries and imposed conditions that the incoming Obama administration can easily lift.

“To go against the will of the Senate, using TARP funds like this, is exactly the wrong thing to do,” Sen. John Ensign (R-Nev.) said in a phone interview with The Hill.

Ensign and other Senate Republicans last week blocked a package to provide bridge loans to the auto industry after the legislation was approved by the House. Republicans had also objected to using TARP funds as loans to the auto companies.

“Now TARP funds can be used for anything, and I’m sure other industries like the airline industry will soon be lining up,” Ensign said.

Party leaders also fired the first shots of the next battle over the bailout: Whether the key wage-parity requirement that Bush included in his action Friday will remain once President-elect Obama takes office.
Bush would require autoworkers to accept wages and benefits competitive with those paid by foreign producers operating in the U.S. by the end of 2009. The demand for that condition by Republicans killed last week’s auto package in the Senate.

Republicans said they worry that requirement — an attempt to force the United Auto Workers to bring its wages in line with those of foreign automakers by the end of 2009 — does not have the rule of law and cannot be enforced after Bush leaves office.

“These conditions can be eliminated with an eraser because it’s not written into law,” Ensign said.
Senate Republican Leader Mitch McConnell (Ky.) said the GOP will push to keep the conditions on the automakers, and that it is “important that the date-specific requirements on all the stakeholders be enforced.”

Ensign said he pressed the point that the conditions could not be enforced in a personal phone call to White House Chief of Staff Josh Bolten earlier in the week. He said he was told Bush’s staff believes it will be “very difficult” politically for Obama to erase the conditions.

House Speaker Nancy Pelosi (D-Calif.) and other Democrats, however, quickly signaled they will press Obama to do so.

“The White House proposal unfortunately singles out workers and clearly puts them at a disadvantage before negotiations have even begun,” Pelosi said in a statement.

Rep. John Dingell (D-Mich.), a longtime auto industry ally, said Obama should eliminate the wage condition swiftly after he is sworn into office, while House Financial Services Committee Chairman Barney Frank (D-Mass.) called the wage provisions “unnecessary.”

“I believe that the incoming administration and the Congress should take whatever steps are necessary to remove them,” Frank said in a statement. “All stakeholders including union employees must negotiate cost reductions but this must be done with equal burden-sharing and with a result that will be much fairer than the president’s approach.”

Likewise, the UAW said it will join the effort to erase the requirements.

“These conditions were not included in the bipartisan legislation endorsed by the White House, which passed the House of Representatives and which won support from a majority of senators,” said UAW President Ron Gettelfinger.

Obama issued a statement calling the bailout “a necessary step to help avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers.”

Aside from their complaints over the wage conditions, congressional Democrats also hailed Bush’s action, saying that without the bailout, the economy would have suffered catastrophically.

“We’re glad he stepped up,” Sen. Carl Levin (D-Mich.) told reporters in a conference call. “This is basically very good news for the American economy and the very many families that depend on the auto industry.”

Pelosi said Bush’s action “provides an opportunity for the American automakers to become viable and competitive while securing millions of jobs.”

House Republican Leader John Boehner of Ohio, however, said the Bush administration “has failed both autoworkers and taxpayers.”

Harsher criticism came from Sen. Jim DeMint of South Carolina, one of seven GOP senators who wrote Bush this week to discourage the action he took Friday.

He declared Bush’s actions unconstitutional.

“The executive branch must have the consent of Congress to appropriate taxpayer funds,” DeMint said.

Even one of Bush’s staunchest Senate allies, Minority Whip Jon Kyl (R-Ariz.), issued a harshly critical statement, saying Bush acted “directly contrary to congressional intent,” “justified his action with a false choice” and “thwarted the will of Congress.”