Thursday December 11, 10:49 pm ET
By John Crawley and Richard Cowan
WASHINGTON (Reuters) – The U.S. Senate failed on Thursday night to reach a last-ditch compromise to bail out automakers, effectively killing any chance of congressional action this year.
Republican-brokered talks faltered, leaving the chamber at a dead end on an approach for extending $14 billion in loans to avert a threatened collapse of one or more automakers, Senate Majority Leader Harry Reid said in remarks on the floor.
“It’s over with,” Reid said.
And with that dies any last lingering justification for governments in Canada spending billions of dollars they don’t have to prop up Detroit’s tottering Canadian transplants. I’d make the case for refusing a bailout even if the Americans had agreed to one — the willingness of other countries with deeper pockets than ours to subsidize industry makes any attempt to play beggar-thy-neighbour on our part not just ill-advised, but futile — but if Washington is not willing to blow its brains out, then certainly there’s no reason we should.
Amazing what a difference it makes having a few genuine free-marketers in the legislature, isn’t it?
WASHINGTON (AP) – A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.
Senate Majority Leader Harry Reid said he was “terribly disappointed” about the demise of an emerging bipartisan deal to rescue Detroit’s Big Three.
He spoke shortly after Republicans left a closed-door meeting where they balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers.
By saying no to Detroit, the feds will be in a better situation to say no to all the other supplicants lining up outside their door: Nortel, Big Oil, the tech sector, the Atlantic premiers, the western premiers, the Ontario and Quebec premiers, etc etc. Whereas if they shell out for Big Auto, it will be open season…
MOREOVER: We should be clear who the biggest winners are from this. It isn’t the taxpayer — although taxpayers will indeed be winners. It’s workers and firms in every other industry, who will not now see capital investment and consumer dollars diverted into staving off bankruptcy for GM and Chrysler that might have been available to them. There never was a good reason to favour autos over other industries. And subsidizing everybody in the name of equal treatment is even sillier. You can’t redistribute from everybody to everybody…
Dec. 12 (Bloomberg) — The Bush administration dropped its opposition to using the $700 billion bank bailout to provide financing for U.S. automakers, after the Senate yesterday failed to approve emergency loans.
“Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry,” Treasury spokeswoman Brookly McLaughlin said in an e-mailed statement.
The Treasury has used all but about $15 billion of the first half of the Troubled Asset Relief Program’s funds since the plan was enacted Oct. 3. Treasury Secretary Henry Paulson has until today repeatedly resisted calls to use the program to aid the automakers.