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Capital Briefs June 8, 2009

GM bailout under fire…

GM BAILOUT UNDER FIRE: As the Obama Administration began laying out details of the restructured bankruptcy of General Motors last week, the federal bailout is coming under intense fire — from the voters. A just-completed Rasmussen Poll showed that only 21% of voters nationwide support a GM bailout, while 67% oppose it. When asked their choice between government funding for the auto titan or letting GM go out of business, 32% of voters supported the bailout, while 56% said it would be better if GM failed. With the government’s providing $50 billion in funds and getting 70% ownership of the restructured car company, only 18% of voters believe that Washington will do a good job overseeing GM.

INDIANA SUES OVER CHRYSLER DEAL: Before details of a similar reorganization with Chrysler had been announced by the administration, the state of Indiana last week filed a lawsuit against what is sure to be the next big auto bailout with tax dollars. On Thursday, the 2nd U.S. Circuit Court of Appeals in New York halted the sale of Chrysler to Italian automaker Fiat Corp., announcing it would hear Indiana’s arguments in a court hearing the next day. In the suit, Indiana State Treasurer Richard Mourdock noted that the 5th Amendment to the Constitution states that private property “cannot be taken without due process.” Under the terms of the arrangement, Mourdock told HUMAN EVENTS, “the secured creditors in Chrysler will get only 29 cents on the dollar for what they invested in the company.” Secured creditors include thousands of retired Indiana state troopers and teachers whose pensions are invested in the company, he pointed out, contrasting this to Fiat getting 20% of the reorganized Chrysler. “How do President Obama and Secretary [of the Treasury Timothy] Geithner justify pensioners taking losses, while a foreign-owned business gets 20% of the new corporation without investing a single penny in the deal?” Mourdock asked.

LEFTIST PARTS WITH OBAMA: One of the most sharply worded liberal criticisms of Barack Obama appeared last week in the left-of-center American Prospect magazine. Noting that Obama is one of only three Democratic nominees for President he had voted for with enthusiasm (the others were Lyndon Johnson and George McGovern), Prospect Editor Robert Kuttner cited as one reason for his disappointment with the current President his “circuitous, Wall Street-friendly approach to reviving banks.” He also faulted Obama for hiring protégés of Clinton Treasury Secretary Robert Rubin “during the campaign when he needed to demonstrate that he was reassuringly mainstream. They stuck around — and their advice could sink his presidency.” Contrasting Obama today with FDR’s first year in office (when he pledged to “drive the moneychangers from the temple”), Kuttner warned that Obama could “blow the opportunity that history has handed him, and that the political right, though currently in disarray, will pick up the pieces.”

ANOTHER REPUBLICAN FOR OBAMA ADMINISTRATION: Two weeks after he tapped Utah Republican Gov. Jon Huntsman Jr. to be ambassador to Beijing, Barack Obama pulled off another raid on the GOP last week, naming Rep. John McHugh (R.-N.Y.) as secretary of the Army. The departure of the nine-term lawmaker and one of only three GOP House members left in New York State means another special election for Congress later this year. Although Republicans hold a voter-registration edge of about 47,000 in the 23rd District and McHugh rarely had trouble winning re-election, Democrats note that Obama carried the district and they are expected to field a strong contender — possibly State Sen. Darrel Aubertine, whose senate district lies entirely within the 23rd.

BURRIS ON THE ROPES: During his five-city tour in Illinois last week, appointed Democratic Sen. Roland Burris got precisely the reception he didn’t want. At each stop, reporters hammered Burris about the recent release of an FBI recording made of a meeting last year at which Burris offers to raise money for the re-election of then Gov. Rod Blagojevich and voices interest in appointment to the Senate seat vacated by Barack Obama. One month after the recorded meeting, Blagojevich, who has since been impeached and removed from office, named Burris to the Senate. “Did I try to buy the Senate seat? Never,” Burris repeatedly said in prepared remarks during his tour. “Did I commit perjury? No.” Other Democrats are not so sure, and calls for Burris not to run for a full term were mounting last week. Chicago businessman Christopher Kennedy (son of Robert) has signaled he will seek the Democratic nomination regardless of what Burris does, and other Democrats may run as well. Moderate Republican Rep. Mark Kirk and former HUD Secretary Steve Preston are both reportedly considering trying for the GOP nod.

MINNESOTA SHAKE-UP: Republicans from Minneapolis to Washington were stunned last week by the decision of two-term GOP Gov. Tim Pawlenty not to seek a third term next year. The moderate conservative Pawlenty, who had reportedly been on John McCain’s short list as a running mate last year, was shown leading all potential Democratic opponents in most polls and had been considered a prospect for the GOP presidential nomination in 2012. His decision came as he was grappling with the state legislature over the state budget. One scenario now being discussed is a bid for governor by former Sen. Norm Coleman, if (as is increasingly expected), he loses the court battle with Democrat Al Franken over last fall’s disputed Senate race. Onetime St. Paul Mayor Coleman lost the three-way race for governor in 1998 that was won by Reform Party candidate Jesse Ventura.    

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