[Congressional Record (Bound Edition), Volume 154 (2008), Part 18]
[Senate]
[Pages 24714-24718]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           AUTOMOBILE CRISIS

  Mr. CORKER. Mr. President, I rise today to talk about where we are in 
this auto bailout. In essence, it is show time here. A bill came over 
from the House last night. It is the end of the year. There is an 
impending crisis we are dealing with here in the country. So today we 
will be debating that and hopefully in the next few days take a vote.
  I spent a lot of time in the committee talking with certain and 
various parties involved. I spent a lot of time outside the committee 
doing the same thing. There is no doubt we are going through an 
economic time that is very difficult for the auto industry. It is also 
difficult for businesses and families all across this country as they 
try to make their budgets work out.
  As we have looked at this issue, I know there has been a lot of 
negotiation that has taken place between the White House and House 
Democrats. I really think the product that has been developed is a very 
poor product.
  I don't blame that on my Democratic colleagues who negotiated because 
the White House is actually at a point where they are looking for the 
next flight out of town on January 20. Basically, they want to kick the 
can down the road and let some other administration and some other 
Congress deal with this issue. All of us are going to be here next 
year. It is our responsibility to deal with this issue in a 
professional and a competent manner and actually solve the problem.
  I say to my colleagues on both the left and right, on the Democratic 
and Republican sides, we have a historic opportunity to actually solve 
this problem. The solution is very simple.
  I have looked at this legislation that has come over. It is similar 
to so many things we do around here. It is akin to a three-humped 
camel. You couldn't make it more ineffective and more complicated. We 
have put in place a czar. It seems like with everything we do around 
here, we try to find a person who can save us from the crisis that is 
happening. We did the same with the financial rescue package not long 
ago. I have looked at the actual responsibilities of this czar. I said 
yesterday I had a banking staff person who actually could fulfill those 
responsibilities. She read that in the paper this morning and came in 
and said she is overqualified, that in essence this is not something 
she would want to take on. I think we can use some help, certainly, 
from the outside, and there may be a role for somebody such as this. 
But what we are looking at is a fairly simple transaction. It is a lot 
of money, a fairly simple transaction.
  Here is what we have. We have three companies. Two of the companies 
are on the verge of bankruptcy. As a matter of fact, I would say two of 
the companies are in bankruptcy. I know Chrysler, today, is meeting 
with their supplier group. I know if they don't win concessions today, 
they are in great trouble. General Motors has told us if they don't 
receive funding by the end of this year, they will have to file 
bankruptcy. I believe that.
  We have a lot of Republicans who would like to see that happen, would 
like to see chapter 11 occur and to see them go through the laws that 
exist for reorganization in a way that is clean and allow them to move 
ahead in a financially stable way. As a matter of fact, many 
Republicans would actually agree to something called debtor-in-
possession financing after that occurred so these companies could 
evolve. There are people on the other side of the aisle who have 
decided that is a cost that is too great to bear.
  I started out along the path that I believed the best way for us to 
solve the problem was to actually cause these companies to go through 
reorganization and any role we might play as the Federal Government 
would be in the way of debtor-in-possession financing. After listening 
to the testimony and after talking to people all across the country who 
are involved, I do believe the supply chain is in great stress. They 
are undercapitalized. The three companies have already been utilizing 
the supplier chain for financing by paying late and carrying payments 
for lengths of time. I do think the supply chain is fragile.
  What I have tried to do is figure out a way to create a piece of 
legislation that is elegant, simple, actually solves the problem, and 
causes these companies to be in great shape and for us to be able to 
move ahead and know that has been done.
  There are a lot of times I have heard people say: We are from the 
Government, and we are here to help you. When people hear that, they 
usually run for the hills. This is a case where if we will take a 
moment, we can actually do something that is great for these companies. 
We have a big stick. These companies cannot get financing anyplace 
except from the Federal Government. So we have an opportunity to sort 
of thread the needle in a simple way and cause these companies to be 
successful.
  Let me say, other than the economic issues, these companies have 
three major issues. Each one of them is different. We know that 
basically we are talking about General Motors here. We wouldn't be 
having this discussion if it weren't for General Motors. Chrysler would 
not be here if it weren't for that. They are in serious trouble but 
wouldn't have the clout to be able to talk to us in this way. Ford has 
money today because of refinancing they did back in 2006. They are not 
even part of the discussion today. They might be down the road, but 
today they are financially viable, although burning cash at a rate that 
is almost equal to that of General Motors. We are talking--to make this 
clear to people-- about three entities we need to talk to: General 
Motors, Cerberus or Chrysler, and the UAW.
  There are three things that are basically causing these companies 
difficulty. One is the capital structure. The debt these companies have 
is not sustainable. It doesn't matter how much money we were to put 
into General Motors; with the $62 billion in debt they have today, 
there is no way they can sustain their company. They cannot. GM only 
has a market cap today of around $2 billion. Toyota has a market cap of 
$130 billion. BMW has a market cap of $14 billion. So this is a company 
that has a huge amount of debt and very little value. Chrysler probably 
has no value. They are privately held. So we have two companies we need 
to deal with in a similar way, as it turns out.
  Let me lay something out. Right now the capital structure in both 
places is too high. Cerberus and Chrysler can't withstand its debt. GM 
cannot withstand its debt. Secondly, the labor costs are out of line. I 
know there is a lot of talking about the UAW. Candidly, I will admit, 
in some cases they get a bad rap. A lot of the people who are my 
friends would not like me saying that, but in some cases they actually 
get a bad rap as to the way the comparisons go.
  The third issue is the dealership issue. I don't think we can deal 
with

[[Page 24715]]

that today. There are two issues we can deal with in this loan and 
solve the problem. One is the capital structure. The other is the labor 
issue. Here is what I propose. We will be putting this forward, as 
Senator Reid mentioned. We have some alternative legislation. I hope it 
is something both Democrats and Republicans can embrace. It is very 
simple. Let's go ahead and fund the money. Let's fund the money that 
has been requested. To Republicans, that is like debtor-in-possession 
financing anyway because these companies are basically bankrupt. To 
Democrats, the funding is in place to cause these companies to be 
whole. Let's go ahead and fund the request that has taken place.
  Let's have three covenants. We can do this with a very short bill 
which we drafted. The first covenant is that by March 15, the 
outstanding indebtedness at the two companies that are going to apply 
for this has to be reduced by two-thirds or the companies have to file 
for bankruptcy on March 15. That gives the companies, the bondholders, 
which we have talked to on the phone, plenty of incentive to make sure 
the debt is reduced by two-thirds so these companies have a capital 
structure that allows them to go forward. This is the only way they 
will be successful. We have had plenty of people testify that if we put 
our money on top of the $62 billion in debt GM has, there is no way 
they can be successful, even if we are selling 20 million cars a year. 
Today, we know, we are selling at a 10 million rate. That is No. 1. 
Give them the money. If by March 15 they haven't reduced their capital 
structure in that regard--and we have talked to people on all sides who 
believe this can happen, but it can only happen with the stick of 
Government, meaning we are going to force them into bankruptcy if they 
don't do it. That is the first covenant.
  The second covenant is, I have listened to Mr. Gettelfinger's 
testimony and talked to him on the phone this morning. He says the only 
way the UAW can make concessions is if they see the bondholders have 
done so first. This legislation makes that happen by March 15. So, 
secondly, after the UAW has seen that the bondholders have taken a 
``haircut,'' a word that is used around here a lot, they have to do two 
things: No. 1, they have to convert half the VEBA obligation, the 
Voluntary Employee Benefit Association obligations. They have to 
convert half those to equity. If the company goes bankrupt, these 
future payments are never going to happen anyway. Again, that reduces 
the debt at GM by another $10.5 billion, and it gives the UAW equity in 
a company that actually has value now because the debt by the 
bondholders has been reduced. That is the second covenant--very simple.
  The third action they have to take is at that same public meeting 
where they take a vote, they have to agree to have a contract in place 
that puts them in parity with companies such as Toyota and Nissan and 
Volkswagen and other companies here. Before everybody goes crazy over 
that, that is as certified by the Secretary of Labor. That is not 
something we prescribe. I realize there will be subtleties in that. 
There are comparisons that have to be made. To my friends on the left, 
that would be a Secretary of Labor by the Obama administration who has 
the ability to look at the various differences and nuances to actually 
certify that.
  I have talked to Ron Gettelfinger this morning. Because of the 
debates we have had recently, I am probably not on his Christmas card 
list this year. I realize that. But he actually is talking with his 
leaders about this. I have talked to the COO at General Motors last 
night and this morning. He was the former chief financial officer. He 
agrees this will work. This gives the stick to the Government to make 
them have to do the things they need to do to actually cram down their 
bondholders.
  I have heard a lot about Main Street and Wall Street. For those 
people who want to take an ounce or a pound of flesh from Wall Street, 
those are mostly the people who own these bonds. They will be taking 
this huge haircut, two-thirds. In GM's case, it is about $20 billion 
that would be converted to equity and take away a face amount of debt.
  I plan to be here all day today. I would like to take 30 minutes off 
from 12:30 to 1 to give a talk someplace. But I would ask any Democrat, 
any Republican to please come down to the floor, call me, e-mail me, 
tell me why we couldn't put in place these three covenants which are 
very reasonable. They are the only actions that can happen in real time 
to make these companies successful. Let's pass a bill that causes these 
companies to be strong, gives them the money to breathe.
  By the way, we had somebody testify the other day in Banking who said 
that if we give money to these companies in the form they are in today, 
we will end up giving $75 to $125 billion. I talked to the President of 
GM this morning. He says if we can make this happen--of course, the 
bondholders say we can, he says we can--that they will be limited in 
their request to only what they have asked for. They do not believe any 
more U.S. dollars will be required.
  I ask my colleagues, why would we not take a simple piece of 
legislation, put it in place. It acts like debtor-in-possession 
financing. It does what we need to do to make sure the bondholders and 
the UAW themselves do the things they need to do to make the company 
whole. Management is already hamstrung by the bill. It lays out the 
items management must forgo for these loans to be in place. Let's leave 
here having done something that actually causes these companies to be 
healthy, vibrant, able to go into the future in a strong way for the 
first time in 30 years. We can do something great today, if we will 
only sit down and do it.
  I ask my colleagues to do one other thing. We have tried to make this 
so complicated. There are three groups each of you can call to see if 
this will work. Call Chrysler, call General Motors, call the UAW and 
ask them if this will work. If there is a sentence we need to change, a 
comma we need to put in place, let's do it. But it is very simple. We 
have drafted a bill as if we are saving the world. We are talking about 
three companies alone, actually two companies today alone and three 
covenants can solve this problem, put them on a solid foundation, move 
them ahead. We will have done the right thing for the American 
taxpayers. We will have done the right thing for these companies, and 
we will have acted responsibly together in concert, doing something 
that, again, is right for our country.
  Mr. President, thank you for the great length of time. I hope my 
colleagues on both sides of the aisle will come down and tell me why 
this will not work. Thank you very much.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Georgia.
  Mr. ISAKSON. Mr. President, will the Senator from Tennessee yield for 
a question through the Chair?
  Mr. CORKER. Yes.
  Mr. ISAKSON. First of all, Mr. President, I commend the distinguished 
Senator for all the work he has done on this issue over the last 2 
months. But I have one question. Is it not true that almost all those 
conditions in those three conditions you outlined were in whole or in 
part verbally contemplated by the automakers in terms of what it is 
going to take for them to come back and be profitable in the first 
place?
  Mr. CORKER. No question. I say to the Senator from Georgia, they have 
come in our offices and actually--they have advisers. Their financial 
advisers have told them that they need for us to craft this legislation 
this way so they have the hammer they need to make the bondholders 
reduce their debt so they can be healthy. Without this kind of hammer, 
nothing is going to happen.
  Look, you have read this bill. This bill says they have to have a 
plan to show a net present value in place by March 31--a plan. It does 
not say when it has to be accomplished. We can solve this problem so 
simply for them, for the United Auto Workers, for the State of 
Michigan.
  By the way, for the record, I want to say I have a General Motors 
plant in my State. It is very important. It is modern. It has been 
invested in. We

[[Page 24716]]

have a Nissan plant, and we have a Volkswagen plant coming.
  The automobile industry is very important to me, as I know it is to 
you, I say to the Senator from Georgia. I thank him for that question.
  Mr. ISAKSON. Mr. President, I say to the Senator from Tennessee, I 
thank you for your hard work.
  Mr. President, I yield back.
  The ACTING PRESIDENT pro tempore. The Senator from Oklahoma.
  Mr. INHOFE. Mr. President, I also thank the Senator from Tennessee 
for all his labors and what he has been through. Quite frankly, I came 
back from the Horn of Africa and Afghanistan on Saturday or Sunday--
anyway, over the weekend--and when I saw all this stuff coming up, I 
knew from my experience in the Senate that nothing was going to happen 
for a few days, so I did not stay and work hard like my friend from 
Tennessee. I went back to Oklahoma. I do that now and then just to talk 
to normal people, to hear what these people have to say, as opposed to 
the bureaucrats and the stuff we get in Washington.
  In a way, it is a little bit humorous. We went through the $700 
billion bailout. I can remember everybody talking about Secretary 
Paulson coming down and saying: The world is going to come to an end if 
we do not do this. He said: We are going to have to do it.
  Well, we did some calculations, and I do not think most of the 
American people realize when we talk about these numbers--whether it is 
$14 billion or $700 billion--how much it really is. If you did your own 
math when this stuff comes up--this is what I always do--there are 139 
million families in America who file tax returns. If you take the 139 
million families and divide that number into $700 billion, that is 
$5,000 a family. Now we are talking about something that is serious. 
When I tell people in Oklahoma that, that gets their attention.
  So here we are talking about $14 billion right now. Nobody seemed to 
care before, and we just passed that matter by a huge margin: 75 to 24. 
I was one of the 24 who voted against the $700 billion bailout. But we 
passed it by that huge margin, more than 2 to 1. It is something that 
is so much bigger than the $14 billion we are talking about now. We are 
making a big issue about the $14 billion. Where was all the concern and 
outrage when we were talking about $700 billion?
  So we watched it come along, and we saw that we gave the Secretary of 
the Treasury all the money that he was asking for. Then we find out 
that as to what he was going to use the money for, it was not used for 
that at all. He said, and I heard it myself--everyone in here heard it: 
the Democrats heard it; the Republicans heard it--if we don't have this 
$700 billion to buy out troubled assets, this whole country is going to 
go down--this doom and gloom. Once he got it, he did not do it. He did 
not come to us and say: Well, there is a different plan now. We are 
going to use it in some other way because I don't think this is going 
to work.
  So that got my attention. I decided at that time: Well, if they are 
going to go ahead and give him this $700 billion, let's see what there 
is in that law that we passed that might be to the benefit of people 
who are concerned about this issue. I saw that it was broken into two 
parts. The first $350 billion pretty much was given to him to use at 
his discretion, which he did. He did not come to us and say he was 
going to use it in a different way. He just went ahead and did it. It 
is the first time in the history of America that anything close to $350 
billion was spent in such a way.
  Then we have in the law that was passed a provision that says if he 
needs the other $350 billion, he can go ahead and do that, and if there 
is not an objection--as a matter of fact, if he does this, and does 
this when we are out of session, we would be helpless to try to do 
anything to stop it.
  So I introduced a bill. It is S. 3683. It is not going to be 
considered. I am not a member of the club, so that is not going to come 
up, although we have made an effort and we actually have some Democrats 
on the bill. That is something that uses the rules that are out there 
and says we can change the second $350 billion so it will take a 
positive act of Congress to allow them to access the second $350 
billion.
  Now, let's quickly jump back to the current issue. I wanted to put 
that in perspective because when we talk about $14 billion, compared to 
$700 billion, I just wish there was that much outrage when we were 
making that commitment. So here we are talking about one unelected 
bureaucrat to be known as the car czar--get ready for the car czar. We 
have only had one good czar in the history of America that I know of, 
and that was Bill Bennett when he was the drug czar. However, he was 
not given a blank check to spend a whole bunch of money. He is just a 
brilliant guy who was going to try to stop some of the stupid things we 
were doing in this country. That was back in the 1980s when the drug 
problem first surfaced as a major problem. He did a great job. I draw 
him out as an exception when I talk about czars. Now we are talking 
about a car czar. This guy is going to have the same bureaucratic power 
that Secretary Paulson had during the time he pulled off this $700 
billion bailout.
  Now, this bill makes the U.S. Government, the taxpayers, part owners 
of these companies. This $14 billion bill is one that is going to 
surface probably today. People are talking about, and the leader talked 
about, maybe we will go all the way through the weekend if we do not 
get something done. But the instrument that came over from the House 
yesterday to the Senate is most likely what we are going to be 
considering, and it is one that makes the Government part owners of 
these companies.
  The car czar does not have any specific instructions, such as 
renegotiating some of the union contracts and some of the things that 
will have to be done. I looked at this early on, and I thought, as 
undesirable as bankruptcy is, I do not know of any other way you can 
actually force the tough negotiations that will have to take place. It 
has to be management and labor. It is not just labor; it is not just 
management. There has been mismanagement. But they would have to 
satisfy the courts that we have a system that will work.
  I read an article in the New York Times from the middle of November, 
and it was entitled ``A British Lesson on Auto Bailouts.'' It discussed 
the British treatment of the Leyland automobile in the 1970s and 1980s. 
The article reported that the British Government ultimately spent--
well, transferring this or putting this in U.S. dollars--they spent 
$16.5 billion--that is comparable to what we are talking about now--to 
bailout the British automobile company called Leyland.
  The article quoted a top official from the Thatcher government, which 
reluctantly but ultimately backed the bailout. He said:

       I'm not telling the U.S. what to do, but the lesson of the 
     British experience is don't throw good money after bad. 
     British Leyland carried on for a few more years, but they are 
     not there now, are they?

  No, Mr. President, they are not. They are bankrupt after burning 
through the taxpayers' bailout dollars.
  Now, why we now believe Government bailouts and Government ownership 
of shares of these companies is going to be a successful venture 
without a clear idea of what these companies would do to significantly 
alter their business models, and at least until well into next year--I 
do not know why we think this because it has not happened. It has not 
happened successfully before.
  In the New York Times, just a few days ago, Jeffrey Garten, who 
served as Under Secretary of Commerce during the Clinton 
administration, and who is now a professor at Yale University, was 
quoted as saying this:

       We're at this moment in history, in which the Chinese are 
     touting that their system is better than ours with their mix 
     of capitalism and state control and our response, it looks 
     like, is to begin replicating what they've been doing.

  Now, that is what he says we are doing: replicating now what the 
Chinese have been doing. I have to say this: I am very much concerned 
about the Chinese. I have spent quite a bit of

[[Page 24717]]

time in Africa and other parts of the world. But in Africa, the 
Chinese, I think, pose the greatest threat to us. It is an economic 
threat as well as a military threat. But, nonetheless, does that mean 
we should be doing what they are doing? And we are replicating their 
system, according to Jeffrey Garten.
  I cannot support Congress using taxpayer dollars to bail out yet 
another industry. I can remember when we were talking about this a few 
weeks ago with the $700 billion bailout. We were talking about this as 
if this were something that was going to be a one-shot deal. I said, 
standing on this Senate floor, that as soon as this goes through, they 
are going to start lining up.
  I said: You are going to get not just the bankers, you are going to 
get the auto dealers and the airlines and everybody else out there 
saying, well, if this is what is out there, bail me out, too. I want to 
be bailed out.
  So this is what is happening. We are now looking at one unelected 
bureaucrat administering a brandnew Government program with taxpayer 
dollars buying ownership in an industry. I think we have heard this one 
before. I know the American people have heard this before also.
  This is exactly what Secretary Paulson did. I am talking about the 
massive $700 billion financial bailout legislation. Let's keep in mind, 
we are talking about an amount that is far less than that. We are 
talking about $14 billion.
  I remember talking on the Senate floor when it looked as though we 
had $350 billion that was not going to be used. In fact, Secretary 
Paulson said--this was interesting--right before we went into recess, 
Secretary Paulson said: We have no intentions of using, no reason to 
use the other $350 billion. We have a reserve that we have not spent 
yet of about $15 billion.
  I responded and said: Well, if you do not have any intentions of 
using it, let's go ahead and change the system so you cannot use it. I 
do not want to have us adjourn and find out: Oh, I think we will use 
another $350 billion, which is comparable to about $2,500 per family 
filing a tax return.
  Well, the Congress gave Secretary Paulson the $700 billion in two 
installments, and we all know how that second installment is. I have 
authored two bills. One of them is S. 3683, sponsored by, of all 
people, Bernie Sanders, the one who is a self-proclaimed socialist, a 
guy who is on the opposite end of the philosophic specter from me. Yet 
he knows this is something that is wise: to have accountability for the 
$350 billion. I do not have her name on here, but I think Senator 
Mikulski might also have been on here because I was on the Senate floor 
with her, and she said it would be a good idea. We have Senators 
Barrasso, Wicker, DeMint, Roberts, and Vitter.
  This legislation would freeze the unexpended expenditures of the 
original $350 billion and require an affirmative vote--is that asking 
too much--an affirmative vote to access the remaining $350 billion. It 
is automatic now. That is all we are asking for.
  So I think that as we talk today--and, hopefully, this will be over 
tonight; I anticipate that it will because it goes on and on and on, 
and nobody, right before Christmas, wants to be working over the 
weekend when it looks like nothing meaningful is going to happen--let's 
bring it on, bring on the bill. Let's have a vote on it. Let's get it 
over with today, and, hopefully, we can reject it. think a lot of 
Members in this body, some of those who supported the $700 billion 
bailout, have a chance at redemption right now by opposing this 
legislation.
  So, once again, let me just put it back in perspective. I came back 
from Afghanistan on the weekend and I saw the discussion take place, 
and I had an idea, through the experience I have on the Senate floor, 
that nothing was going to happen for the next 2 or 3 days, so I went 
back to Oklahoma and talked to real people.
  By the way, I have to say this: I talked to a lot of dealers in 
Oklahoma about the idea of a car czar, and because of the prospect of a 
Washington bureaucrat telling the car manufacturers how to run their 
businesses and what kind of cars to make, it did not give them hope for 
the future. These people were opposed to it. I know a lot of the car 
dealers are for this. They are concerned about keeping the parts 
inventories and all of that, but I look at this, and I don't see any 
other way it can happen.
  By the way, I would say concerning this bailout bill, I don't think 
they did anything to address the California waiver. This is something 
that has to be done if they are really sincere about this bill that 
came over from the House. Someone can correct me if they have corrected 
the problems of the California waiver; I don't think they have. Right 
now, there is litigation out there, where California wants to be able 
to determine what its tailpipe restrictions are. It is in the courts 
right now, but if they are successful, then that would mean we have 50 
States that can determine what their emission requirements are in their 
State. You talk about one factor driving up the price of cars, that 
would be it.
  Again, I don't know for sure what all is in this thing from the 
House, but I do know this: The basic bill is the same bill that we had 
before. It is based on a concept that the bureaucracy can run the free 
enterprise system better than the free enterprise system can, and it 
doesn't work. Let's solve the problem of the $14 billion, but let's get 
some people to join in with me on the Senate bill that will allow us to 
require an affirmative vote for the second $350 billion.
  Let's put that in perspective: $350 billion as opposed to $14 
billion. I think it deserves the attention of the Members of the 
Senate.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. ENSIGN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. ENSIGN. Mr. President, I rise today to speak about the possible 
bailout of the Big 3 automobile manufacturers. General Motors, 
Chrysler, and Ford have come before this Congress asking for tens of 
billions of dollars from the taxpayers. This bailout, however, raises a 
number of questions that concern me greatly.
  The economy of the United States is rooted in free-market principles. 
These principles, coupled with our Nation's entrepreneurial spirit, 
helped America become the richest and most innovative country in the 
world. Even though our economy is struggling right now, we cannot 
abandon those principles.
  American automobile company executives have made many poor decisions 
over the past few decades. Those decisions combined with a poor 
economy, have put them in a desperate situation, particularly General 
Motors. It seems to me that this is exactly why we have Chapter 11 
bankruptcy. Now, when I say bankruptcy, I am not talking about 
liquidation. That is Chapter 7 bankruptcy. Chapter 11 bankruptcy 
provides struggling companies with the opportunity to restructure 
responsibly so that they can transform into efficient and profitable 
firms. Chapter 11 exists to protect both the employees and the company 
itself by giving them a chance to get things right. The Big 3 should 
not view Chapter 11 as some sort of death sentence. Instead, they 
should see it as the best opportunity to put themselves on the same 
competitive footing with companies such as Toyota and BMW. Venerable 
companies in America such as Macy's and Continental Airlines have filed 
for Chapter 11 and have emerged as stronger, more viable companies. So 
why should the Big 3 be treated any differently?
  I know these companies would say they are somehow unique and that 
bankruptcy simply will not work for them. I am not so sure about that. 
The Big 3 worry that today's financial environment would prevent them 
from securing debtor-in-possession financing from the private sector. 
They would need such funding to keep operating through a bankruptcy 
proceeding. This is where the government can step in.

[[Page 24718]]

This would ensure that automakers have the funds to complete the 
Chapter 11 process.
  The Big 3 also worry that few consumers would buy a car from a 
company that might not be around in a few years to stand by the car's 
warranty. Again, the government could step in and guarantee the 
warranties. After all, what is a better backup of a warranty than the 
full faith and credit of the U.S. Government? And if the government 
took these steps, wouldn't that give the Big 3 a good chance to 
successfully reorganize through Chapter 11 bankruptcy?
  The Big 3 have testified before Congress that they would require 
about $34 billion to avoid liquidation. They would need this help over 
the next year or two. Many independent analysts, however, believe that 
number may triple that. Frankly, I am more inclined to believe the 
independent estimates are closer to reality. After all, the Big 3 have 
time and again proven unable to adequately plan for the future. Why 
should we believe their projections now? With the deficit reaching $1 
trillion or more next year, why aren't we having a debate over the true 
cost of such a bailout? We should be worried about the U.S. taxpayer.
  In this legislation, there has been talk about creating a ``car 
czar'' to oversee any restructuring that would accompany a bailout. 
This czar, however, would not have nearly the same sort of powers a 
bankruptcy court judge would have under Chapter 11. Injecting a 
government bureaucrat into the process is not a serious solution. If 
you have been around Washington long enough, you know it is more like a 
serious problem. Wouldn't it be better to have an expert such as a 
bankruptcy court judge oversee the process?
  Not only would a bankruptcy judge have more tools than a car czar, 
but the judge would not be influenced by the political process. A 
bailout would invite all sorts of meddling from lawmakers to have the 
companies carry out their own pet policies. We should not be using this 
bailout as a vehicle to implement domestic social policy.
  Not to mention that creditors or stakeholders will just lobby 
Congress to make the sort of concessions that would be required of them 
under the bankruptcy. We see this sort of lobbying right now with the 
TARP program. Everyone is trying to tweak the program to benefit their 
own narrow self-interest. Why would we expect the auto unions or 
suppliers or dealers to behave any differently? I worry that 
politicizing the restructuring of the Big 3 would jeopardize any 
chances of success they may have.
  All this talk of government-directed restructuring also raises bigger 
picture questions. Why does Congress think we can succeed where so many 
businessmen have already failed? What sort of experience in the car-
making business does this Congress have? Last I checked, none of my 
colleagues have a background in running a car company. And this car 
czar seems doomed to failure too. One government bureaucrat to oversee 
the reorganization of three massive companies? What track record can we 
point to that makes us think this will work?
  This strikes me as a questionable intervention by the government into 
the private sector. We have the government thinking it can run these 
businesses better than they can. Heck, we cannot even run the 
government. We also have the government choosing which individual 
companies deserve help and which do not. This is not what the 
Government should be doing. Government should not be picking winners or 
losers in the private sector. For the long-term health of the country's 
entrepreneurial-based economy, this could be a dangerous precedent.
  One of the companies asking for a bailout is Chrysler, which is owned 
by an investment fund known as Cerberus. Some reports indicate Cerberus 
may have significant asset holdings, into the billions of dollars. But 
it appears Cerberus has done nothing to infuse any emergency cash into 
Chrysler to save it. Why should the government bail out Chrysler, when 
its own parent company seems unwilling to offer any help?
  If we bail out the car companies, what does that mean for other 
struggling industries? The automakers are not the only ones suffering 
today in this bad economy. Would we have to bail out every large 
company in every major industry? Tourism is one of America's biggest 
industries and has a high employment multiplier, much like the auto 
industry. Hotel rooms are going empty as consumers cut back on travel. 
Many state economies, such as in my own State of Nevada, are hurting 
because of the downturn in consumer travel. Should the hotels receive a 
bailout? How about the newspaper industry? We know their businesses are 
hurting too. The Tribune Company filed for Chapter 11. Should we be 
bailing them out as well? Where do we draw the line? Can we even draw a 
line once we have given the Big 3 a bailout?
  The proposed automaker bailout is indicative of a big-government 
approach to dealing with our economy. We are in the midst of a 
recession, yet we have come back for a late session of Congress to talk 
about saving just three companies. Why aren't we considering pro-growth 
policies to help the larger economy? We should be considering long-
term, pro-growth tax cuts rather than searching for ways to spend more 
of the taxpayers' money. For instance, lowering the corporate tax rate 
would put more money back into the hands of companies all across 
America. This would help companies stay afloat and to avoid cutting 
jobs during these difficult times. Instead, the Democrats are looking 
to spend money on bloated, uncompetitive automakers.
  As we debate whether to loan billions of dollars to the automakers, I 
urge my colleagues to consider all the important questions I have 
raised today. This issue is not as simple as answering ``how many jobs 
might be lost?'' or ``how much it will cost the government?'' We must 
also consider questions such as ``what is the Government's proper role 
during this economic downturn?'' ``What could be the unintended 
consequences of our actions?'' ``Are we setting a dangerous precedent 
for needless political intervention?'' ``How might this affect our 
ballooning deficit?'' ``Are we taking the best course of action for the 
long-term health of the U.S. Government?''
  We would do America a disservice by approving any bailout package for 
the Big 3 before finding at least some consensus on these questions. 
Furthermore, I believe we must look more closely at Chapter 11 as a 
viable option for the automakers. Chapter 11 reorganization for any of 
the Big 3 is far from ideal, but we do not live in an ideal world nor 
during ideal times. We should not dismiss one of the most powerful 
tools available to us so readily.
  I hope my colleagues will think long and hard about the issues I have 
raised today before making any decisions about the possible bailout. If 
this bailout package that is before us today fails, we can rewrite the 
bill and do it in a way that is better for the U.S. auto manufacturing 
industry. American taxpayers deserve nothing less.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Brown). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CARDIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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