The Senate bailed out on the bailout:
The Senate on Thursday night abandoned efforts to fashion a government rescue of the American automobile industry, as Senate Republicans refused to support a bill endorsed by the White House and Congressional Democrats.
The failure to reach agreement on Capitol Hill raised a specter of financial collapse for General Motors and Chrysler, which say they may not be able to survive through this month.
After Senate Republicans balked at supporting a $14 billion auto rescue plan approved by the House on Wednesday, negotiators worked late into Thursday evening to broker a deal but deadlocked over Republican demands for steep cuts in pay and benefits by the United Automobile Workers union in 2009.
The failure in Congress to provide a financial lifeline for G.M. and Chrysler was a bruising defeat for President Bush in the waning weeks of his term, and also for President-elect Barack Obama, who earlier on Thursday urged Congress to act to avoid a further loss of jobs in an already deeply debilitated economy.
“It’s over with,” the Senate majority leader, Harry Reid of Nevada, said on the Senate floor, after it was clear that a deal could not be reached. “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”
It appears that the Republicans — especially those from states like Alabama, Tennessee and Kentucky where there are non-union auto plants — didn’t really want to see the bailout pass in the first place; they went through the motions so that they couldn’t be portrayed at the outset like anti-union corporate thugs out of the 1930’s. The union pay-cut sticking point should not have been a deal-breaker. It was just the excuse they needed to shoot it down.
“It sounds like the U.A.W. blew it up,” said Senator David Vitter, Republican of Louisiana.
Senator Richard C. Shelby of Alabama, the senior Republican on the banking committee and a leading critic of the auto bailout proposal, said: “We’re hoping that the Democrats will continue to negotiate but I think we have reached a point that labor has got to give. If they want a bill they can get one.”
If GM and Chrysler file for bankruptcy protection, it will not mean the end of the companies. They will get a chance to get their act together by not being forced to pay their creditors. That gives them a little breathing room, but the problem doesn’t stop there. The auto industry isn’t just the big plants in Detroit; it’s the hundreds of suppliers — the creditors — who are left holding the bag. These are not big companies, either. The shop that makes the roller bearings or the springs for the company that makes the car seats; they employ maybe a fifty or a hundred people, and they’re located in places like Beulah, Michigan, or Fostoria, Ohio, or Henderson, Kentucky. When they can’t pay their creditors, they don’t have highly-paid lobbyists to go to Washington to work out a deal; they close their doors. Ironically, these are the small businesses that employ the so-called Joe Sixpacks that the GOP is so happy to parade around during the campaigns and crow about how they’re on their side…by keeping gays from getting married. Sure, you lost your job and your house and your kids don’t have any health insurance and their schools look like the bottom of a birdcage, but at least you don’t have to worry about the queers and their rights.
Yes, there’s a Plan B. The Bush administration, which banked what was left of its credibility on the deal, can get the money from the $700 billion bailout already passed by the Congress in September. But the Senate Republicans have clearly proved that after all the years of rubber-stamping the deficit spending of the last eight years and basically handing the keys of the treasury to banks through deregulation, they can turn around and become the soul of Ebeneezer Scrooge in the middle of a recession — and just in time for Christmas — in order to score political points with the constituency that they betrayed.