The long expected bankruptcy of General Motors has come to fruition leaving folks in and outside of the beltway asking why billions of taxpayer dollars were dumped into the company before the inevitable bankruptcy, and why $30 billion more were added to the bailout yesterday.
President Obama declared in his announcement of the GM bankruptcy yesterday that he didn’t want to run a car company while talking about all of the demands he’s made of GM from personnel changes to what kind of cars they can build. Shouldn’t a GM executive have made the bankruptcy announcement? Somehow Obama’s claims of the federal government being a reluctant owner didn’t quite gel.
Regardless, the Obama administration and the United Auto Workers’ Union have bought themselves a car company using taxpayer dollars.
Rep. John Boehner (R-Ohio), the House minority leader, spoke yesterday of the deep concerns being voiced around the country questioning the government’s involvement and asking for the exit strategy.
“This agreement may buy some time, but does nothing to ensure GM’s success,” Boehner said. “The only thing it makes clear is that the government is firmly in the business of running companies using taxpayer dollars. Does anyone really believe that politicians and bureaucrats in Washington can successfully steer a multinational corporation to economic viability? It’s time for the Administration to fully explain what the exit strategy is to get the U.S. government out of the board room once and for all.”
“The success of our automotive industry is critical to families, workers, and communities across America, including my home state of Ohio,” Boehner concluded. “But the policies coming out of Washington have been conflicting and counterproductive, while leaving American workers holding the bag. On one hand, the Administration says it is committed to keeping GM afloat, but then it announces increased CAFE standards that would force more American auto jobs overseas. Auto workers and retirees, their families, and all taxpayers deserve better.”
Sen. Jim DeMint (R-S.C.), chairman of the Senate Steering Committee, talked about the billions of taxpayer dollars wasted by the failed bailout legerdemain.
"The price tag of government bailouts for GM and Chrysler has climbed to more than $60 billion but failed to stop the bankruptcy many of us knew was inevitable six months ago,” DeMint said. “We could have saved the American people a lot of money if we allowed these companies to restructure last year. Instead, special interest politics trumped common sense and billions have been wasted and tens of thousands of jobs have been lost. Now the government has forced taxpayers to buy these failing companies without any plausible plan for profitability. Does anyone think the same government that plans to double the national debt in five years will turn GM around in the same time?”
Republican Study Committee chairman Tom Price (R-Ga.) talked about the Obama administration’s plan to dole out yet another $30 billion in federal money to GM on top of the $20 billion from the first bailout for a 60 percent stake in the company.
“Once again, the President has put taxpayers on the hook for billions of dollars with no clear exit strategy,” Price said. “Bankruptcy protection exists so private companies can negotiate with creditors and stakeholders in order to re-emerge as viable. The White House should have no place in these negotiations. Unfortunately, this is just another sad chapter in President Obama’s eager campaign to interject his administration in the private sector’s business dealings. Now, taxpayers are forced to sink another $30 billion into a restructuring plan headed up by an administration notoriously devoid of business expertise.
“Washington’s ongoing reach into the private sector must stop,” Price concluded. “We have seen time and again that when the government attempts to set business practices for private corporations, it ends in spectacular failure. It is time to stop circumventing both the markets and the legal process. Today’s bankruptcy filing is long overdue, but it should have been done without interference from the White House.”
Rep. Jeb Hensarling (R-Texas), a member of the Congressional Oversight Panel, began the day renewing his call for oversight hearings into the Obama administration’s handling of the auto bailouts and by the end of the day had announced that he had gotten a commitment from Democrats to hold the hearings.
“I am pleased that the Congressional Oversight Panel will hold this important oversight hearing in July,” Hensarling said. “While I opposed giving TARP money to the automakers, taxpayers deserve transparency and need to know that their tax dollars are being spent fairly and to promote financial stability. Many believe that TARP is being used instead to promote a social agenda and to reward the allies of the administration. This hearing will be a venue for seeking answers to such important questions.”
Americans Not Confident in the Federal Government, Unions Doing a Good Job in Running GM
Rasmussen Reports conducted May 2-3, 2009, survey of 1,000 adults nationwide asking, “It is likely that the United Autoworkers Union and the federal government will end up as the primary owners of both General Motors and Chrysler. Will these owners do a good job or a bad job running the auto companies?”
35% Not sure