[Congressional Record (Bound Edition), Volume 154 (2008), Part 18]
[Senate]
[Pages 24307-24308]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         AUTO INDUSTRY BAILOUT

  Mr. SPECTER. Madam President, earlier today, Senators Levin, Bond, 
Voinovich, Stabenow, Brown, and I announced a legislative proposal to 
deal with the crisis being faced by the automobile manufacturers. For a 
protracted period of time, Congress has wrestled with this issue. There 
have been many conflicting points of view as to what ought to be done. 
There has been little public sympathy for the plight of the auto 
manufacturers because they have been on notice for a long while of the 
need to reorganize and to approach the manufacture of automobiles 
differently in order to compete with foreign cars. There have been 
repeated efforts in the Congress to impose mileage standards. Finally, 
that was done last year. Now, with the severe economic problems facing 
the country, the automobile manufacturers find themselves in dire 
straits. The chief executive officers of General Motors, Chrysler, and 
Ford have been on Capitol Hill with very gloomy predictions as to the 
future of their companies if they do not get economic aid.
  It is a difficult matter to provide economic aid to all those who are 
in need. It is true the Federal Government has provided economic 
assistance to Bear Sterns and AIG, turned them down with Lehman 
Brothers. We are well aware of the fact that there could be very 
serious repercussions for the economy as a whole if the auto 
manufacturers fail. There has been considerable talk that they could go 
into a reorganization and bankruptcy and could

[[Page 24308]]

emerge. That may well be true. But that could be risky as to what would 
happen.
  The Congress authorized some $700 billion to assist on an economic 
recovery. That legislation has not been warmly received by the American 
people. During the month of October, I traveled broadly in Pennsylvania 
and found very strong public sentiment in opposition. The Congress 
acted in the face of having our backs to the wall or a gun at our heads 
or any other metaphor of a critical nature that one would choose.
  On September 29, the House of Representatives failed to pass an 
economic recovery program. Senators were notified to be in the Chamber 
at 7:30 on Wednesday evening to vote. Regrettably, that legislative 
process did not follow regular order. It started off with a bill with 
papers from the Treasury Department. It wasn't a bill. It was a 4-page 
memorandum, later expanded to more than 100 pages, ultimately to more 
than 400 pages. But when regular order is not followed, the consequence 
is likely to be not so good. Regular order requires a bill that one can 
read and study. It requires hearings before a committee where people 
are proponents and opponents. There is examination and cross-
examination to get at the facts. Then the committee--in this case, the 
Banking Committee--would sit down and have what is called a markup to 
go through the bill line by line.
  I explain this in some detail so there might be some understanding, 
if anybody is listening on C-SPAN this afternoon. Certainly, the 
Chamber is customarily barren, as is frequently the case. Senators are 
busy with other matters. Then after the markup, the committee files a 
report. Then it comes to the floor. There is debate, discussion, 
amendments. Then the Senate works its will. On the House side across 
the Rotunda, down the hall, the House of Representatives goes through a 
similar process. Then representatives of the two bodies meet for a 
conference. Then that is presented to the President. So there is a 
great deal of refining.
  That didn't happen with the $700 billion economic aid proposal. It 
turned out there was a lot of pork in the final draft that no one had a 
chance to strike, to offer amendments. It was embarrassing to have to 
defend that kind of a bill as I traveled my State in October to explain 
it. So there is great skepticism, fairly stated, among the American 
people as to the wisdom of the Congress in putting up $700 billion.
  Now, with the automakers coming in asking for economic aid, the 
question arises, who next? Last Friday, I wrote to our leaders urging 
that we not rush to judgment. I made a similar request, made an 
extensive floor statement earlier this week on Monday. That letter and 
others are in the Record, and I will not encumber the Record further 
because they are available for anyone who cares to look at them.
  Secretary of the Treasury Paulson has been unwilling to use the $700 
billion to assist the automakers. He may be right about that or he may 
be wrong about that. But that is the position the Treasury Department 
has taken, saying that money is for the economy generally.
  Then the idea has been proposed--and has been embodied in what 
Senators Levin, Stabenow, Voinovich, Bond, Brown, and I announced 
earlier today--to use funds up to $25 billion from the 2007 
appropriations which had been designated to meet the mileage 
requirements but not a blank check. Before any of those funds could be 
utilized at the direction of the Secretary of Commerce, there would 
have to be a plan. There would have to be a factual statement as to 
what the condition of the automobile manufacturers is, what would be 
done with the additional funds, what would be undertaken to guarantee 
that the moneys would not be used for increased executive pay or 
corporate jets or golden parachutes. There would have to be some hard, 
concrete facts laid out.
  Last Friday, as I put in the Record this week, I wrote a letter to 
the chief executive officers of the three companies. I got no response 
from General Motors. I got no response from Ford. Frankly, I'm a little 
surprised that when an inquiry is made in that context, there is not an 
effort to respond, not to reach out but to respond. But executives from 
Chrysler came to see me, and I raised the questions as to what their 
condition was, how much cash they had on hand, how much cash they 
needed, what they would do with an infusion of economic aid, and what 
were the prospects for a recovery.
  That matter has now been put over by the leaders until December 8. So 
we now have 2 weeks, next week and the week after. Presumably, on the 
week of December 1, there will be hearings. The automobile 
manufacturers are going to have a fairly heavy burden of demonstrating 
that there is a plan which will be viable, which would have a realistic 
likelihood of success.
  I understand the concern of the environmentalists. My record for 
environmental protection is very strong. But those in the environmental 
community have raised the concern that the $25 billion ought not to be 
directed away from changes on gas mileage. We are talking about a 
bridge loan. The concern is, if action is not taken now before a new 
administration, that there could be a disastrous result. As Senator 
Voinovich pointed out, the recession or economic problems could be even 
more serious. The expression he used, which I think is not 
inappropriate, it could go over the cliff. Nobody knows. But that is a 
risk, if we are going to wait until January 20. It may even be a risk 
in waiting until mid-December, but that is the course which we are on 
now. Of course, Secretary Paulson has the discretion, as he has 
conceded, to act with the funds which are now available. But in any 
event, I believe the legislation which was announced today by the six 
Senators,--three Democrats, three Republicans, on a bipartisan basis--
is a useful approach for the future. This is very important. This is 
not an extra appropriation. We are not putting up more money. It is a 
different use of moneys already put up. The environmental issues could 
be safeguarded after January 20. With the Democrats in control of both 
Houses and the White House, they could write their own ticket to 
replenish that fund, if they choose to do so. But at least we are on a 
course now in the reasonably near future to provide a legislative 
approach if--and it is a big ``if''--the auto manufacturers can come 
forward with a hard statement of facts as to where they are, a hard 
statement of facts of what they could do with these funds to show their 
viability.
  So we will await those hearings, and we will await what they do. But 
I would emphasize they will have to persuade the Congress to vote for 
the plan. But in order to persuade the Congress, they are going to have 
to persuade the American people over the course of the next 2 weeks 
with something a lot more specific than they came to town with over the 
course of the past several days and a lot more responsive than two of 
the companies not even responding to my request for a statement as to 
their case, as to how they propose to remain viable with the economic 
aid.
  I thank the Chair, and, in the absence of any other Senator on the 
floor, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. WARNER. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. The Senator from Virginia is recognized.

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