Congress faces pressure to help embattled auto industry

WASHINGTON, Nov 16, 2008 (St. Louis Post-Dispatch - McClatchy-Tribune News Service via COMTEX) -- GM | Quote | Chart | News | PowerRating -- When Congress returns this week for the last business of the old political order, members will face intense pressure to add the auto industry to the growing roll of America' corporate-bailout recipients.

The Big Three automakers and a forceful business/labor lobby are pushing a plan to slice off $25 billion from the $700 billion for emergency loans to the industry amid warnings that General Motors Corp. may not survive until year's end without government help.

Yet it remained far from certain whether they can succeed given opposition from Republicans, the jarring precedent of yet another bailout and a lame-duck president who might want to extract support for an unpopular trade deal with Colombia.

House Republican Whip Roy Blunt of Missouri, in his last weeks as a GOP leader, typified the attitude of many in his party's caucus about putting taxpayers further on the hook for Detroit's woes. In September, Congress approved an initial $25 billion in low-interest loans for the auto industry in an energy bill, an untapped pot of money to promote better fuel-efficiency.

``The auto industry is important in Missouri; I've always been a supporter of the industry'' Blunt said. ``But once you go through that door, you're going to find a long line of people waiting ... whether it's the airline industry or the travel industry .... and saying through no fault of our own, we've got some real problems,'' said Blunt.

House Democrats, as Blunt acknowledged, surely can pass any auto industry bailout they want given their numbers. That would put the onus on the Senate, where a handful of Republicans could decide whether the latest auto industry bailout succeeds.

Senate Majority Leader Harry Reid, D-Nevada, said Friday he intended to open debate Monday on the auto loans and proceed to a test vote on Wednesday.

He acknowledged reality in a letter asking for Senate Republican Leader Mitch McConnell of Kentucky for help. ``Republicans are prepared and able to block such legislation,'' Reid wrote, ``and I hope you will reconsider.''

Democrats will be having conversations among themselves about what strings to attach and how to protect taxpayers.

Sen. Claire McCaskill, D-Mo., said she supported the loan concept but worried about the lack of accountability to taxpayers. ``We are going to have to do more to protect tax dollars for me to vote for this,'' she said in a statement.

Other Democrats likely will push to put off such weighty matters as a new bailout until the Barack Obama era arrives buttressed by even bigger Democratic majorities in Congress.

Members of both parties will be ducking an assortment of lobbyists like the Chamber of Commerce's R. Bruce Josten, who argues that the risks in waiting are too great given the auto industry's reach into the broader economy.

In his pitch, Josten notes that the auto industry is the largest purchaser of domestic steel, aluminum, plastic, glass and even computer chips, products of 800,000 suppliers all told.

Other industries, he said, can ask, `Why not me?' Where do you stop? But not every one of those sectors has quite the footprint of autos.''

Republicans on the hot seat also will be making hard political calculations given their second straight election thumping. Democrats take over in January with swelled majorities and the firmest ideological grip on Washington since Lyndon Johnson era of the 1960s.

McConnell, who barely survived re-election, is among those who can afford to be stubborn. One of the GOP senators up in 2010, George Voinovich, of Ohio, decided Thursday to support the bailout.

``People think this is a gimme handout,'' remarked Voinovich spokesman Chris Paulitz. ``We're talking about a loan that has to be paid back.''

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Sen. Kit Bond, R-Mo., is another senator up in 2010, and he seemed prepared to listen. "While I have real concerns with another taxpayer funded bailout, there are also thousands of workers in Missouri whose jobs are on the line so the devil will be in the details'' he said.

Congress also could move this week to finally make the earlier energy-related $25 billion loans available to the auto industry.

Bond planned to move separately Monday to boost auto sales with a bill to make interest payments on auto loans and state sales taxes tax-deductible. The legislation he planned to introduce with Sen. Barbara Mikulski, D-Md., would give tax breaks on vehicles purchased from last Wednesday through the end of next year.

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Hosting Obama at the White House last week, Bush raised the importance of passing the Colombia Free Trade Agreement - interpreted by some as the beginning of bargaining over the automakers' requests.

But judging by plummeting support for trade deals, passing the Colombia pact or any other global agreement could be difficult any time soon. Agribusiness interests are pressing hard for the agreement with Colombia; the St. Louis-based National Corn Growers Association says that tariff-removal under the deal every farmer with 500 acres of corn would see an $1,000 additional income due to increased demand.

The growing suspicion among voter toward trade deals was underscored this month by defeat of prominent supporters of trade deals among them Reps. Phil English of Pennsylvania and Robin Hayes of North Carolina, the two Republicans who cast the final votes when the Central American Free Trade Agreement passed by two votes in 2005.

Critics of global trade deals said last week that they will have added more than three dozen House members and senators to their cause in this election.

Lori Wallach, director of Public Citizen's Global Trade Watch, said it could be difficult for Democrats in Congress to act given Obama's pointed assertion in the last presidential debate that labor leaders in Colombia are being targeted for assassination, with no prosecutions.

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(Angela Tablac of the Post-Dispatch contributed information for this report.)

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