Today in Washington D. C. - Dec 12, 2008 - Bailout Dead

Other than for pro forma sessions to keep the President from ever being able to make recess appoints, the 110th Congress is over. Neither the House or Senate is expected to have any more legislative business in this Congress and is scheduled to adjourn sine die on January 2. The 111th Congress is scheduled to convene on January 6.

Though negotiations on a loan package for domestic automakers continued late into the night in the Senate yesterday, resistance from the United Auto Workers union eventually made it clear that no deal would be possible. Senators then defeated a cloture motion on a bill to be used for the auto money by a vote of 52-35, short of the 60 votes needed. Among those voting against the bill was Democrat Senate Finance Committee Chairman Max Baucus of Montana.

The deal stopper for those who voted against cloture was the unwillingness of UAW to concede any ground on establishing a target date for union salaries and benefits to be reduced equivalent to salaries paid by auto-manufacturers in other states. Many people, especially those in states with auto-manufacturing plants, are arguing that a bailout of the Big-3 in Detroit, Michigan is unconstitutional because it removed the equal protection guaranteed by the U.S. Constitution. The Federal Government is taking taxes from people and competitors in other states to prop up a business, for auto manufacturers their competitor, in Michigan.

Now Democrats will pressure the President, to intervene and to take unilateral action to used previous funding to help the Big 3 although such action may not be constitutional or legal.

From Senate & News Sources: The AP reports on the details: “Republicans . . . refused to back federal aid for Detroit’s beleaguered Big Three without a guarantee that the United Auto Workers would agree by the end of next year to wage cuts to bring their pay into line with Japanese carmakers. The UAW refused to do so before its current contract with the automakers expires in 2011.” Roll Call also has a good summary of the end of the negotiations last night, noting that “GOP Senators said union representatives were holding out for a 2011 date [on pay parity] and language that would give them more discretion to keep wages above those of workers at foreign-owned plants.”

Senate Democrats, including Majority Leader Harry Reid, swiftly attempted to put all the blame on Republicans, despite the fact that they spent the better part of the week writing the bill themselves. But, Senate Republican Leader Mitch McConnell explained the real issues on the floor last night, “None of us want to see [the auto companies] go down but very few of us had anything to do with the dilemma that they’ve created for themselves. And so the question was: is there a way out? The Administration negotiated in good faith with the Democratic Majority a proposal that was simply unacceptable to the vast majority of our side because we thought it, frankly, wouldn’t work.”

Sen. John Thune (R-SD) elaborated for Roll Call, “I think getting Republicans to vote for something that is considered to be some sort of a rescue package or bailout for this industry right now is a very heavy lift absent some of these reforms right now. So far everybody’s given something here except the unions.”

As Sen. McConnell said yesterday, “[I]n the end, [this bill’s] greatest single flaw is that it promises taxpayer money today for reforms that may or may not come tomorrow. And we would not be serving the American taxpayer well if we spent their hard-earned money without knowing with certainty that their investment would result in stronger, leaner auto companies that would not need additional taxpayer help just a few months or weeks down the road. We simply cannot ask the American taxpayer to subsidize failure.”

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