HAS MCCONNELL KILLED DETROIT’S RESCUE PACKAGE?…. Last night, the House approved an emergency plan, crafted by negotiations between congressional Democrats and the Bush White House, which would have directed $14 billion to U.S. auto manufacturers. It passed 237 to 170. Expecting success in the House, senior White House officials were dispatched to the Hill to lean on Senate Republicans to support the measure.
Bushies probably don’t realize that their influence on the Hill is gone. Today, Senate Minority Leader Mitch McConnell (R-Ken.) announced that he’s ignoring the president’s request and will oppose the bailout measure. McConnell’s move “all but assures” the legislation’s defeat.
The Kentucky Republican, with a large auto presence in his state, had been seen as a potential ally for the industry, and he provided crucial support for the Treasury Department’s financial markets rescue fund this fall. But he has since endured a punishing reelection fight. And faced with strong resistance in his caucus, he said that the bill “isn’t nearly tough enough” and that he could not ask taxpayers to “subsidize failure.” […]
While not entirely surprising, the Republican opposition stands in contrast to what have been significant concessions by Democrats to try to move the bill forward.
“Much of this bill is dictated by the president. It is a stunning vote of no confidence,” [Rep. Barney Frank (D-Mass.)] said of the Republican opposition.
Without McConnell’s support, the measure, as passed by the House, won’t be able to withstand a Republican filibuster. That said, according to a report in The Hill, McConnell said the bill would be more appealing if Sen. Bob Corker (R-Tenn.) could add amendments that would require the automakers to reduce two-thirds of their outstanding debt through an equity swap with bondholders as a condition for aid. Corker would also require the companies to reduce labor costs, and mandate that a portion of payments automakers make to labor unions consist of company stock.
It’s safe to assume Senate Democrats will not think highly of Corker’s efforts to change the compromise rescue package.
The likelihood of GM’s bankruptcy has gone up considerably.