The Senate bailed on the auto bailout, while big insurers and banks that have fattened themselves off of tax shelters continue to hog it at the trough.
A number of Senate Republicans didn't like the bill because it wasn't heavy-handed enough on auto workers. They balked because they wanted "steep cuts in pay and benefits for members of the United Automobile Workers union in 2009." See Andrews & Herszenhorn, White House Open to Using Bailout Money to Aid Detroit, NY Times, Dec. 12, 2008. Republican-linked "think tanks" (really, ideology-tanks would be a better name) have been busy propagandizing on this issue by asserting that the automakers are handicapped by one problem--overpaid workers. That, my friends, is bull. The problem is that managers and investors have been short on vision for the future for years, while sucking the lifeblood out of corporations like the Big 3 and refusing to fund upfront the pension promises they make, and then forcing concession after concession whenever the hard times hit (while managers still get their fat cat bonuses and jet-pack percs). The union has at least one decent wages and benefits for auto workers--too bad workers across the rest of the country are fed constant misinformation (and intimidation) about unions by the walmartization of the economy (big corps can rake in profits and avoid taxes by whatever means, including the "off-stating" state income tax shelter version of the federal income tax offshoring scam, but workers are encouraged to depend on the state for their health coverage). So people on the street are saying--why help those auto companies when their workers are getting too high wages, as much as $75 an hour? But it isn't true. FactCheck.org does a good job of debunking the misleading propaganda in a recent Q/A: Do Auto Workers Really Make More than $70 an Hour? No. For the record, the average wage of the unionized workers is $29 an hour (and that will go down for any new hires, who will after recent concessions come in at lower pay scales).
The proposed bailout passed by the House was certainly problematic--first, because there seemed to be more focus on getting a "car czar" that could be heavy-handed with workers (but not firing the clueless execs) (see above) than on figuring out how to move the auto industry into the new age while keeping ordinary Americans employed, and second, because even here Congress saw fit to build in two tax provisions that were giveaways to banks and insurers (requiring the use of taxpayer money to make banks and insurers whole on the SILO tax shelters they sold to municipalities) and giveaway to takeovers/investors in the auto companies (undoing the provisions against abusive uses of losses by those that didn't incur them). See Citizens for Tax Justice release.
Perhaps some light at the end of the tunnel, since the Administration may use the TARP funds to gain some time for the auto companies--and Congress--to figure out a better bailout. See Andrews & Herszenhorn, White House Open to Using Bailout Money to Aid Detroit, NY Times, Dec. 12, 2008. The White House admitted that “A precipitous collapse of this industry would have a severe impact on our economy,” and added, “It would be irresponsible to further weaken and destabilize our economy at this time.” Id. The White House should use the TARP funds, without trying to break the union while doing so. And then Congress should come back under the Obama administration and put some serious thinking into how to quasi-nationalize this industry to get it working for the people--all the people.
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