Bailout Update
Here's the latest on the mess that is the auto bailout on Capitol Hill. Senate Minority Leader Mitch McConnell today insisted that the GOP be allowed to vote on an amendment by Tennessee Senator Bob Corker.
From his speech on the Senate floor:
“The Corker Amendment does not just encourage reform, it requires it. And it does so with crucial specificity. First, participating companies would be required to reduce their outstanding debt by at least two-thirds through an equity swap with bondholders.
“The Corker Amendment also requires that labor costs at participating companies be brought on par with companies like Nissan, Toyota, and Honda — not tomorrow but immediately — because it is delusional to think that a company which spends $71 per labor hour could compete with a company in the same industry that spends $49.
“The Corker Amendment would improve the liquidity and cash-flow of automakers by requiring that a portion of the payments made to union accounts consist of company stock.
“And finally, the Corker Amendment would require participating companies to file for Chapter 11 reorganization if any of these conditions aren't met by a fixed date.
“The Corker Amendment forces necessary reforms, holds companies accountable, and assures taxpayers that these companies won't be back for more. If legislative action were necessary, the Corker proposal would make many much needed and dramatic improvements to the underlying bill.”
In a similar speech, Senate Majority Leader Harry Reid this morning said he's more inclined to allow substitute bills than amendments.
“I've had calls from a number of senators today; frankly, mostly Republican senators, telling me that they have a solution to all the problems of the auto industry. Just need a few amendments. Mr. President, we have done our very best to include everyone that wants any input into this legislation.
"The White House, President Bush and his people, have been heavily involved in this legislation. There was a decision made that the minority would not participate in the preparing of this legislation, but the White house was heavily involved. Negotiations took place for days between Chairmen Frank and Dodd and the White house and now we have a piece of legislation. Some have asked, well what we want is to set up a procedure where we have lots of amendments, and then we'll ultimately vote on the final version.
“Mr. President, I think it's only fair, if the minority, the Republicans, want to have a better bill, then they should offer an alternative. And I invite them to do that. The House passed a bill last night. It would be my suggestion then we, perhaps, have a vote on the substitute or the alternative that the Republicans would put forward, vote on the House bill, vote on the Senate bill. If there's no agreement that can be reached on that, Mr. President, we have danced this tune long enough.”
It seems we have reached détente. We'll see over the next few days who blinks. But a surprising number of aides (and members) on both sides of the aisle reminded me yesterday that President Bush and Federal Reserve Chairman Ben Bernanke do have the authority to act here. If Congress can't get something passed, the market will take a huge hit, yes. But it would also force Bush or Bernanke to deal with the Big Three since everyone agrees that they also have the power to fix this. And, given the last few weeks (or months or years), dumping the problem in Bush's lap would produce no small amount of Schadenfreude on both sides of the aisle on Capitol Hill.
Update:
Apparently, Corker and Dodd are sequestered in the Capitol working on a compromise amendment. As you can see in McConnell's remarks above, Corker's pretty tough on the UAW. But the union is apparently willing to cede a lot of ground in order to see a deal done. Word is the two are surprisingly close to a deal -- though there remains some serious details to be ironed out -- and if an agreement is reached the leaders plan to run to the floor with it tonight.
Update2:
They have an agreement and Corker is meeting with the Republican conference right now to see if the GOP can come up with enough votes. If so, they will vote tonight.
Update3:
The talks collapsed over whether the UAW would accept salary parity with other automakers in the U.S. by the end of 2009. The cloture vote to end debate failed 52-35.
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1
Do my ears deceive me or are the Republicans the ones dictating specific management directives to private industries? Next up, the five-year-plan. Will they next go through the employeee lists themselves to determine who gets laid off?
Damn commies are taking over!
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2
JNS, since you've taken on the auto bailout beat, can you please investigate the additional pork and riders being tacked onto this $15B bill? We've heard about the raises for judges. What else is in there and who is attaching them?
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3
Thanks for keeping us updated JNS.
I'm not sure I would call the situation between the Ds and Rs in the Senate as a détente. More of an impasse.
But maybe I misread. -
4
Paul: I was surprised as well! It's rather like applying Reagan's approach to Democracy in Latin America: you will be competitive in the open market if we have to kill you to make you so. JNS
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5
JNS -- First, thanks for staying with this story for the last few weeks.
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Paul Dirks, I think there is an incredible irony that these "free market" republicans want to micro manage the auto industry. What they want to do is break the union and/or drive this country into a depression. I think it's very cagey of Reid to ask the Republicans to belly up to the bar with alternative bill. I also think he should drive (no pun intended) the republican into a filibuster over this issue and make them take the floor to keep this from coming to a vote.
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JNS, when are we going to see the MSM or you start calling the Senate republicans for what they are: Obstructionist, union busting, seditious leaders who want to drive this country into a depression?
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You could even ask their leadership this question:
"Some say, all you want to do is bust the unions and are unconcerned that killing a bailout would drive this country from a deep recession into a depression. Isn't it true, that you are soft on the economic security of this nation? Isn't killing the bailout putting our nation at risk of depression? Aren't you just being obstructionists?"
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Here I just made your job extemely simple by framing the questions for you. Does anyone have the guts to ask them? -
6
P-nnto: My thought exactly. Hardly détente when the level of disagreement appears to be on the upswing.
Once again the Senate GOP caucus plays the spoiled child, insisting on getting its way and supporting greater income disparity. Damn the consequences.
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7
JNS, sorry you're stuck reporting a story that matters when all the fun is in Springfield, but thanks anyway!
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8
So what is the end game? I hope they can resist the reasonable desire for Schadenfreude and get something done.
Or at least a stop gap for the next 39 days.
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I don't see how the republicans can, in the face of the jobs reports, obstruct this without paying a price. The people in The Corner don't count for very many votes. -
9
McConnell is, of course, lying, on that number.
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And note that the UAW already agreed to huge cuts in future wages just last year.
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The GOP's union hatred has nothing to do with anything that happens in the real world. The party is an alliance of the Pharisees and the money-changers, and the money changers call the shots. -
10
Elvis I'm not sure how, but all this will funnel back to Card Check. Dollars to Donuts.
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11
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12
McConnell said: "...it is delusional to think that a company which spends $71 per labor hour could compete with a company in the same industry that spends $49."
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It truly is delusional. It is delusional to believe that US car companies pay their workers $71 per labor hour. That is a lie. It is intended to smear union workers with the hope of eventually busting the unions.
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As has been pointed out repeatedly, the $71 figure is a dishonest way to blame the UAW for auto industry mismanagement. It's a phony number that tries to make current workers seem responsible for the pensions of their retired predecessors. It is arrived at by adding the cost of retirees pensions to the hourly compensation of current workers.
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How many hours a current worker works or how much he receives in compensation for his work has absolutely nothing to do with the pensions of retirees he probably has never met. It would make just as much sense to add the cost of pensions to the compensation of the auto industry executives and demand to cut their pay instead.
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I would like to see the Democrats respond by calling the McConnell's bluff. Offer to let the GOPers vote on an amendment that guarantees that UAW worker will be paid less that $71 per hour in wages and benefits for his own labor. If the GOP still wants to add retiree's pensions to someone's compensation, add it to the executive salaries and then cut those. -
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Steve Benen says": Without McConnell's support, the measure, as passed by the House, won't be able to withstand a Republican filibuster.
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All right then, Senator Reid. Now is the time to force a real filibuster. -
14
Am I misreading this, or does it seem to anyone else like Republicans are shaking up what is essentially a pretty impressive Union/Management truce born of pragmatism in order to fire the guns of class warfare?
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15
But it would also force Bush or Bernanke to deal with the Big Three since everyone agrees that they also have the power to fix this.
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Well that's a perfect recipe for disaster. If that happens we might as well go knock the car factories down and salt the earth beneath them. -
16
bobcn:
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Well said. Let's all follow the Republicans' union-busting lead and solve the auto industry's problems by cutting the income of workers and retirees. Or by putting the pension responsibility on the backs of the taxpayers.
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Yeah, that's the ticket. Reduce income. That's how you get out of a recession.
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Idiots. -
17
pourme, surely you know it is the Dems who engage in class warfare. The liberal msm has been telling us that for decades.
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How about turning your #14 post into a haiku? -
18
The only difference between this and the early bailouts is the word UNION.
Well that and the fact that this is a much smaller dollar amount. -
19
PNNTO, maybe they should have asked for $200b?
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20
@wvng - for you:
out of many - one
except for union workers
then, no soup for you! -
21
poureme.
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22
I am half-expecting cup-holder amendments. America loves cup-holders.
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23
I'd like to see one, just one bleeping reporter, ask the questions I posted above. These Senators ought go on the record for union busting. The unions are not the be all and end all, but the amount of money the Big 3 are asking for in guarantees is just a pittance compared to 350 B that has poured down the rat hole that is the financial industry.
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24
FlownOver,
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Shhh, that is the dirty little secret. Republicans don't talk about jobs because they have no idea how to create them. Further, they don't talk about causing the Pension Guaranty Benefits Corp. to go bust or the increase in costs for medicare. It is almost as if they want the country to fall into Depression or set up a situation in which Obama has to sacrifice his last 4 years by raising taxes to ensure the survival of the union!
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WTF! Republicans grow up! -
25
"maybe they should have asked for $200b?"
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Truth. Go big or go home, I guess.
- jnsmall @katieinDC medicine sans frontieres (doctors w/o borders in English). if not w/ them then they can refer you. - 28 minutes ago
- jnsmall @katieinDC You should go-it's def an area where help is needed. maybe talk to MSF or the Adventist hospital (Adra). - 56 minutes ago
- jnsmall @katieinDC The Israeli field hosp had 2 neonatal units -but those were the only 2 i saw in Haiti. There's a huge need there for obgyn care - 1 hour ago
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