Congress receptive to aid for automakers
WASHINGTON - After a series of government interventions in the private markets, one seemingly more astonishing than the next, lawmakers found themselves confronted yesterday with the question of when and where to draw the line on future aid.
But with billions of dollars in financial backing already authorized for Wall Street, and with Election Day fast approaching, congressional leaders seemed uninterested in denying help to large employers of blue-collar Americans.
Even as lawmakers in both parties unleashed a barrage of questions about the wisdom of a government rescue for the American International Group, support seemed to be growing quickly on Capitol Hill for $25 billion in loan guarantees to assist the ailing auto industry.
And both presidential candidates, Senators John McCain and Barack Obama, have voiced support for the loan guarantees - an unsurprising stance, given the critical importance of the main auto-producing states, Michigan and Ohio, to the electoral map this fall.
The chief executives of the three big American automakers - General Motors, Ford, and Chrysler - met yesterday afternoon with House Speaker Nancy Pelosi.
When they emerged, they expressed optimism that the loan guarantees would be included as part of a budget resolution that is needed to finance government operations through the end of the year.
"The support that we got was again very encouraging," said Robert L. Nardelli, the chairman of Chrysler.
Pelosi yesterday sharply criticized the Bush administration over the $85 billion bailout of AIG, saying it was evidence of mismanagement by President Bush. But she expressed strong support for the automakers' loan guarantees, which would be used to help the companies meet new fuel-efficiency standards that Congress adopted last year.
Republican congressional leaders, too, said they were in favor of helping the automakers. Representative Adam Putnam of Florida, the third-ranking House Republican, said at a news conference that it was up to auto executives to convince lawmakers of the need for government assistance.
Still, some fiscal conservatives reacted angrily to the prospect of more taxpayer money being used to prop up private companies.
"Federal bailouts may stave off short-term economic damage, but the long-term economic outlook will be much worse if the market is not allowed to make its own adjustments," said Representative Jeff Flake, an Arizona Republican. 