Why the Senate GOP scuttled the automakers' bailout

McClatchy NewspapersDecember 12, 2008 

WASHINGTON — Most Senate Republicans were willing to scuttle the $14 billion auto bailout Thursday night because of their longstanding disdain for labor unions, free-market preferences — and a yearning to show that a month after stinging defeats at the polls, they could stick together.

It also helped that their constituents made clear how much they disliked the idea of another bailout.

None of those factors alone probably could have doomed the auto aid package, which collapsed Thursday night when negotiations over a compromise broke down.

Two months ago, Republican skepticism of government intrusion into private enterprise was not enough to stop the $700 billion financial-industry rescue plan. But this time was different.

Most Republican lawmakers were leery of having Washington rescue a specific industry, and indicated that General Motors and Chrysler should be allowed to file for bankruptcy protection rather than stay afloat with federal loans.

"We have laws, bankruptcy, Chapter 11 laws, that were designed to allow companies that are in financial trouble to restructure in a way that they could come out on the other side healthy," said Sen. Jim DeMint, R-S.C.

Skeptics argue that consumers wouldn't buy cars from a bankrupt company. Nonsense, DeMint said. "Americans are not stupid. They know that this bailout is only a temporary solution," he argued. "They're much less likely to buy an American car with this bailout plan . . ."

Republicans had other philosophical problems. "Government intervention in the marketplace, frankly, cuts against all my ordinary impulses," said Senate Republican Leader Mitch McConnell, R-Ky.

That's not a new Republican view, yet Democrats in the past have sometimes found enough GOP lawmakers who'll vote for what their constituents want, helping them forge majorities that go against free-market dogma.

Other factors intervened this time, however.

One was the autoworkers' union. During the final closed-door negotiations Thursday night, union officials were in one room while management officials were in an adjacent room.

Republicans complained that the union officials had more access to the senatorial negotiators than did management. Democrats denied that, saying that Senate Banking Committee Chairman Christopher Dodd, D-Conn., shuttled between the two rooms.

And, the Democrats said, more union input was needed because of the insistence from Sen. Bob Corker, R-Tenn., that American carmakers bring labor costs in line with overseas-based manufacturers that operate in the U.S. Chattanooga, Tenn., where Corker was mayor before his election to the Senate, secured a new Volkswagen plant in July. Tennessee also is home to GM and Nissan vehicle assembly plants.

Democrats charged that Republicans was out to hurt the union. Corker denied such motivation, saying that the agreement imploded over three words — the date by which the unionized workers would have to achieve parity with those at foreign-owned U.S. plants.

Republicans wanted parity next year; Democrats sought a delay until 2011. Asked why he wouldn't move off the 2009 date, Corker said, "Then I'd be negotiating with myself." Republicans, who rarely get union support in their campaigns, saw little motivation to budge.

Republicans also saw an opportunity they'd sought since Nov. 4, when the party lost the presidency and large numbers of congressional seats. Part of the reason for the losses was President Bush, who had historically low approval ratings, partly because of his stewardship of the dismal economy.

So when Bush joined with Democrats to craft the auto aid bill, largely without the help of congressional Republicans, many GOP lawmakers felt little political obligation to go along. When Vice President Dick Cheney and White House Chief of Staff Josh Bolten met privately with GOP senators on Tuesday, they got what Sen. Tom Coburn, R-Okla, termed "a good dose" of sharp questions.

McConnell, who early in the week held out the prospect of supporting a deal, virtually sealed its doom Thursday when he announced his opposition to the White House-backed plan, and was praised by most Republicans for showing leadership.

They also liked how he and his colleagues were following the first rule of politics: Know your constituency.

Poll after poll told the same story. Gallup reported in a Dec. 4-7 survey that 51 percent opposed the government giving "major financial assistance" to the car companies.

Even more compelling to lawmakers, constituents were angry.

"People don't like rich people, and these guys are not only rich, but they screwed up," said Rep. Ray LaHood, R-Ill., speaking of the Big Three executives who came to Capitol Hill on private jets with cups in hand.

So Republicans could bask in knowing that their anti-bailout stance seemed popular with constituents angry at auto companies, unions and government — all at once. House Minority Whip Eric Cantor, R-Va., was able to sum up the GOP position in a sentence.

"I can't think of anything more nonsensical than replacing those in Detroit who have not been able to make a success out of the auto companies," he said, "and replace them with bureaucrats who are subject to the whim of the politicians here in Washington."

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McClatchy Newspapers 2008

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