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Why Did Congress Stall On Autos Bailout?

Today, following two days of bended-knee pleading by Detroit's Big Three automakers and the UAW head, Democratic leaders in Congress put up a big red STOP sign right in front of them.

It seemed odd. If the automakers don't get instant help, they say they may not make it to January. Whether they go into bankruptcy or out of business or merge with each other, thousands upon thousands of union jobs will be lost.

Those jobs have represented the hard-core base of the Democratic party for decades, and this is a Democratic Congress.

What happened?

One theory: Congress felt baited-and-switched one too many times.

Listen carefully to what House Speaker Nancy Pelosi (D-Calif.) said at a press conference this afternoon.

Pelosi said: "We last talked with the three [automaker] CEOs, they came to us about supporting a merger within the industry. We said, 'Come in and see us.' By the time they came in, they said, 'No, we're not really talking about that now. Now, we're talking about liquidity. We need an infusion of cash."

Does this sound familiar?

When Treasury Secretary Hank Paulson got hauled before lawmakers earlier this week to testify on how he is running the $700 billion rescue/bailout, he was greeted with a variety of emotions, ranging from barely-contained to sputtering rage.

Why, lawmakers wanted to know, are you not spending the $700 billion on what we authorized you to spend it on -- buying toxic assets?

Well, things changed, Paulson explained. But lawmakers were in no mood to hear it.

Today, it sounded like Pelosi was saying: First you come to us asking for money for a merger. Now, you come to ask for money to stay in business. You have got to make up your minds!

"We need to see a path to viability and accountability," Pelosi said, speaking to automakers. "We haven't gotten clarity on what that path is. We know you must be working on it -- have it for us in the next week-and-a-half."

Pelosi didn't add "or else," but she probably didn't have to.

-- Frank Ahrens

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By Frank Ahrens  |  November 20, 2008; 5:39 PM ET
Categories:  The Ticker  | Tags: Detroit bailout  
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Comments

...well, basically that Congress and the President are as responsible for the CDO mess as anyone else is, but the Big 3 created a cowpie of their own making and frankly are now choking on it.

And there just aren't enough wealthy Americans involved to make it worth their time. Unlike with the financial industry.

Posted by: dubya19391 | November 20, 2008 10:29 PM | Report abuse

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