Voinovich signs on to auto bailout

[Ron Burgundy]

The auto industry picked up precious Republican support Thursday as Ohio Sen. George Voinovich said he will sign on to Democratic efforts to tap Treasury’s rescue funds to help the Big Three weather cash problems this winter.

A fiscal conservative, Voinovich did not commit to the full $25 billion package that House Financial Services Committee Chairman Barney Frank (D-Mass.) has said he will complete drafting Monday. But Voinovich has agreed to sign on to a letter that Michigan Democratic Sens. Carl Levin and Debbie Stabenow are expected to circulate next week to build support for some assistance.

“The senator believes helping the automakers remain viable is truly putting Main Street over Wall Street,” said Christopher Paulitz, an aide to Voinovich. "He has signaled his support to Sens. Levin and Stabenow and is working with them on a letter to their colleagues to make this a reality next week during the lame duck. He also wants to ensure that the companies qualifying for [the Treasury funds] are truly viable in order to protect taxpayers down the road."

Critics have argued that given the dire financial straits and huge cash needs for companies like General Motors, it is an error for Congress to rush in with more taxpayer funds. And Treasury Secretary Henry Paulson has been cool to the idea, and the top Republican on the Senate Banking Committee blasted the auto industry proposal on Thursday morning.

“The financial straits that the Big Three find themselves is not the product of our current economic downturn, but instead is the legacy of the uncompetitive structure of its manufacturing and labor force,” said Sen. Richard Shelby (R-Ala.). “The financial situation facing the Big Three is not a national problem, but their problem. I do not support the use of U.S. taxpayer dollars to reward the mismanagement of Detroit-based auto manufacturers in such a way that allows them to continue and compound their ongoing mistakes."

But the political pressure is such that Democrats have felt compelled to at least look like they are trying. Given Senate filibuster rules, Republican support is crucial, and the question now is whether enough Republicans like Voinovich will come forward to ensure the 60 votes needed to win passage.

Levin and his brother Rep. Sander Levin (D-Mich.) have worked with Frank on the package, and one option would be to first attempt to add it to an existing House-passed bill — now pending in the Senate — to extend jobless benefits for the long-term unemployed.

 

source: Politico - http://news.yahoo.com/s/politico/20081113/pl_politico/15588 [link]