The automakers’ bailout is not gonna happen in the Senate due to Republican opposition.
The automakers’ bailout may happen in the Senate because negotiations are now moving forwards.
It’s been a see-saw day in Washington as the White House, Democrats and Republicans have squabbled over a) whether to bail out Detroit and b) if so, how to bail out Detroit in a way so that there is strict accountability and conditions.
Earlier in the day, it looked like the issue was headed to major stalemate…which some economists and politicos insist would have been catastrophic impact on the economy. The sticking point had been Senate GOPers who turned thumbs down on the plan worked out by the White House, Democrats and some House Republicans. Some had even threatened a filibuster. CBS News reported this:
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But now the latest reports suggest there is a bit more optimism:
Prospects for an auto industry bailout revived in the U.S. Senate on Thursday as surprise negotiations on a compromise moved forward and a vote was possible later in the day.
Senate Majority Leader Harry Reid said on the Senate floor that the deal, if struck, “would overwhelmingly pass” the chamber that just hours ago seemed resigned to sending the automakers back to Detroit empty-handed.
The scenario at the core of the possible compromise was proposed by Sen. Bob Corker, a Tennessee Republican, who would grant loans under stricter conditions than favored by Democrats and the White House.
“Good faith negotiations are going on as we speak,” Reid said.
Why the renewed sense or urgency? Perhaps part of it might be due to the fact that news about the economy is increasingly grim. The latest dark cloud news report could have spurred on talks to reach some kind of action to save the automakers:
U.S. exports slid to a seven-month low and the number of Americans filing claims for unemployment benefits surged to the highest level since 1982, signaling the economy is shrinking even faster than previously estimated.
The export slump, caused by recessions spreading through U.S. trading partners, spurred a widening in the trade deficit to $57.2 billion in October, a Commerce Department report showed in Washington today. Initial jobless claims rose more than forecast to 573,000 in the week ended Dec. 6, the Labor Department said.
Rising joblessness will deepen the pull-back in spending by consumers, and the worsening trade balance removes what had been a source of support for an economy that’s been in a recession for a year. The Bush administration said the Labor report shows why U.S. senators should approve an emergency loan for automakers, to prevent a bigger hit to jobs from that industry’s collapse.
“We’ve yet to see the deepest monthly loss of jobs for the current recession, and that’s somewhat frightening,” John Lonski, chief economist at Moody’s Capital Markets Group in New York, said in a Bloomberg Television interview. Payrolls may fall a combined 1.1 million in December and January, on top of the 533,000 drop in November, he said.
Prediction: if there is not even a band-aid solution that emerges from the current Congress, the country’s economy will worse greatly — and quickly. Polls show the public isn’t smitten with the Detroit automakers, but headlines about no bailout followed by news shortly after that about the economy quickly getting worse (another Wall Street nosedive for instance) would not help the image of a GOP already blamed (correctly or not) by many voters for the worst financial meltdown since the Great Depression. The GOP has been taking a hit on this issue as well: some of its critics charge that Republicans were far more sympathetic to bailing out bankers than they are to an industry that employs so many workers and is linked to such an extensive supplies and sales network, reaching down into America’s small towns.
Joe Gandelman is a former fulltime journalist who freelanced in India, Spain, Bangladesh and Cypress writing for publications such as the Christian Science Monitor and Newsweek. He also did radio reports from Madrid for NPR’s All Things Considered. He has worked on two U.S. newspapers and quit the news biz in 1990 to go into entertainment. He also has written for The Week and several online publications, did a column for Cagle Cartoons Syndicate and has appeared on CNN.