Bailing Out the Auto Industry

Although failure of the U.S. auto industry hardly poses the same systemic threat of global financial meltdown that the financial system does, nevertheless it seems that Barney Frank & Congress are pushing ahead for another bailout. Here is another excerpt from LOU DOBBS TONIGHT, on CNN November 12, 2008:

DOBBS: Rising tensions on Capitol Hill tonight over whether to bail out the automobile industry. House Financial Services Chairman Congressman Barney Frank is drafting legislation right now to give the car makers $25 billion of emergency aid in return for a government stay. Republicans, however, increasingly concerned that federal government bailouts are completely out of control. Kate Bolduan has our report from Capitol Hill.

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KATE BOLDUAN, CNN CORRESPONDENT (voice-over): Democrats are ratcheting up pressure on President Bush to go along with bailing out the American auto industry, despite fresh push back from congressional Republicans and the White House.

REP. BARNEY FRANK (D-MA), FINANCIAL SERVICES CHAIRMAN: We will pass the bill and then he can decide to veto it or not.

BOLDUAN: Barney Frank, chairman of the House Financial Services Committee, is the man tapped to craft the automaker bailout bill. According to a Democratic aide, the new bill will include a provision giving taxpayers an ownership stake in the automakers, raising the question of whether the government will demand reforms. A bill could be ready as early as Tuesday, perhaps $25 billion coming from the Wall Street bailout package, money Frank says is needed.

BARNEY: In its weakened question that the economy is in, a total collapse of the American automobile industry would do more damage than not doing anything.

BOLDUAN: This may make next week's lame duck session one last showdown with President Bush. Conservative Republicans are finding it hard to stomach the idea, coming hot on the heels of a string of government rescues.

UNIDENTIFIED MALE: Members of Congress all have these voting cards. Right now, we're using them as credit cards.

BOLDUAN: Republicans like Alabama Congressman Spencer Bachus ask, where do the bailouts end?

REP. SPENCER BACHUS (R), ALABAMA: And I'm afraid if we don't answer the question very soon, when does this stop? That it's going to stop when we run out of money. If we don't, I think the American people will simply rise up and stop us.

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BOLDUAN: Now one big question is what will happen in the Senate. Democrats maintain a slim voting majority here, and there is some skepticism among Republicans, but it's still unclear if there's enough opposition to block this new bill, Lou.