Bush Does a 180: Considers Using Wall Street Bailout for the Big 3
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The White House has said, repeatedly, that it has no intention of using TARP money to support the ailing U.S. automakers. Bush expected Congress to pass a new bill, and negotiated with congressional Democrats -- congressional Republicans refused to join the talks and/or offer their own legislation for consideration -- to strike a compromise.
Now that the deal has collapsed due to GOP obstructionism, the president is reconsidering his position.
In a shift, the White House said Friday morning that it would consider using money from the $700 billion financial bailout to rescue troubled automakers, one day after the Senate abandoned its efforts to pass legislation offering a government rescue to the companies.
Dana Perino, a spokeswoman for President George W. Bush, issued a statement criticizing Congress's failure to pass an automotive rescue plan that had been negotiated between Democratic lawmakers and the White House. Two of the Big Three, General Motors and Chrysler, have said they are so short of cash that they may not be able to survive through this month without aid, and the third, Ford Motor, is also struggling with weak sales.
"It is disappointing that while appropriate and effective legislation to assist and restructure troubled automakers received majority support in both houses, Congress nevertheless failed to pass final legislation," Ms. Perino said in the statement. "Given the current weakened state of the U.S. economy, we will consider other options if necessary -- including use of the TARP program -- to prevent a collapse of troubled automakers." She said that allowing the economic harm caused by such a collapse would be "irresponsible."
Separately, an official at the Treasury Department, which administers the TARP, said that the agency was " ready to prevent an imminent failure" of the auto companies.