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White House Cheat Sheet: Obama Plays Hardball on Autos

President Obama will unveil his plans to save the American auto industry today. AP Photo/Charles Dharapak

The Obama administration's ouster of General Motors Chairman Richard Wagoner coupled with its decision to reject viability plans offered by GM and Chrysler represent a hard line stance toward dedicating government resources to a pillar of the American economy.

"We unfortunately concluded that neither plan submitted by either company represents viability and does not warrant the substantial investments they requested," said a senior administration official involved in the review process.

President Obama is expected to give each company a small time window in which to restructure but his decision not to offer a blank check to the auto industry represents a clear signal that the government will not simply throw money at problems to solve them.

The auto industry bailout (or lack thereof) lands amid a flurry of spending by the Obama administration as it seeks to -- among other things -- revitalize the economy, restructure the banking industry and curb home foreclosures.

It also comes as the House and Senate take up Obama's budget proposal in earnest this week with many conservative Democrats expressing concern about the level of spending outlined in the bill.

Context matters in politics and policy. And the message the Obama administration is sending with their hardball approach on the auto industry is clear: spending for spending's sake -- without significant accountability attached -- will not be accepted.

What To Watch For:

Monday Must-Reads: Monday, Monday.

1. The Post's Mike Shear sets the stage for the president's trip abroad.
2. The New York Times's Mark Leibovich profiles Joe Biden (he's the utility infielder of the White House) even as rumors surrounding the veep's daughter draw unwanted headlines.
3. Will North Carolina Attorney General Roy Cooper (D) challenge Sen. Richard Burr (R) next year?
4. Kansas Gov. Kathleen Sebelius signs a law pushed for by pro-life advocates in her state as she heads out the door for D.C.
5. Rod Blagojevich: The Musical.

Kentucky Senate Gets Interesting: Late last week two things happened in Kentucky: the state legislature ended its session and the Democratic Senate primary got a lot more interesting. Gov. Steve Beshear released a statement endorsing the Senate candidacy of Lt. Gov. Dan Mongiardo in his challenge to embattled Sen. Jim Bunning (R) next November. Mark Riddle, an adviser to state Attorney General Jack Conway (D), who is also expected to run, pooh-poohed the Beshear endorsement almost as soon as it happened. "People will have to decide for themselves whether a tepid statement honoring a long-standing political commitment, done on a Friday afternoon while the Governor is out-of-town is indeed newsworthy," said Riddle. And, one Kentucky Democratic observer said Beshear's endorsement of Mongiardo made it more likely that state Auditor Crit Luallen would run for the seat as she believes she has a stronger chance than Conway to emerge as the alternative to the establishment Mongiardo. Rep. Ben Chandler, the strongest of the potential Democrats, is reconsidering the race but most people expect him to remain in the House.

A New Credit Card Campaign: A new group is funding print and television ads urging members of the House Financial Services Committee to support pending legislation that would eliminate so-called "interchange" fees on credit cards. The interchange fee is the amount a merchant pays a credit card company in any transaction when a credit card is used. The campaign will include print and television ads pressuring seven House members who sit on the committee: Reps. Jim Himes (D-Conn.), Paul Hodes (D-N.H.), Dan Maffei (D-N.Y.), Jim Gerlach (R-Pa.), Shelly Moore Capito (R-W.Va.), Bill Foster (D-Ill.) and Walt Minnick (D-Idaho). There is also an ad "thanking" Sen. Chris Dodd (D-Conn.) for his past support of the elimination of interchange fees. The campaign, which is being funded by the Merchants Payment Coalition, is being organized -- at least at the start -- by Paul Tewes who served as state director for the Iowa caucuses for President Obama.

Ryan for (Lt.) Gov: Youthful Ohio Democratic Rep. Tim Ryan (he's 35) will announce that he is running for lieutenant governor later this week, according to two sources familiar with the decision. The LG's office is being vacated by Lee Fisher who is one of several candidates running for the seat of retiring Sen. George Voinovich (R) in 2010. Ryan would presumably run as the hand-picked choice of Gov. Ted Strickland and, if the ticket is elected in 2010, would be the obvious favorite to replace the term-limited incumbent in 2014. Ryan's departure will create an open seat in the House where state Senate Minority Leader Capri Cafaro would be an early favorite.

Say What?: "They thought it was pretty funny." Treasury Secretary Timothy Geithner on his kids' reaction to his being mocked on "Saturday Night Live" during an interview with George Stephanopoulos.

By Chris Cillizza  |  March 30, 2009; 5:31 AM ET
Categories:  Cheat Sheet Share This:  E-Mail | Technorati | Del.icio.us | Digg | Stumble Previous: Ted Kennedy: A Life (And a Review)
Next: NY-20: Democrat Closes with Palin, Limbaugh

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"And, one Kentucky Democratic observer said Beshear's endorsement of Mongiardo made it more likely that state Auditor Crit Luallen would run for the seat as she believes she has a stronger chance than Conway to emerge as the alternative to the establishment Mongiardo."

um... you look a little silly. Crit is 100% behind Conway, as is Chandler.

Posted by: cubswin39 | March 31, 2009 2:50 PM | Report abuse


Posted by: mattintx | March 31, 2009 10:06 AM | Report abuse

Obama's bromantic partner must let him use the registered word 'Hardball'.

Posted by: newbeeboy | March 31, 2009 8:36 AM | Report abuse

hiberniantears wrote, "What's the deal with your new picture? The awkwardness of that pic is redonkey kong humunculus."

I see no awkwardness, only a love of the gamesmanship of politics - that is to say, a love of politics - and an understanding of it, that has outlived the partisan urge to become self-righteous, bitter, or both, and which enjoys, in the end, a laugh.

May you live long enough, and think hard enough, to smile that way, and not worry so much about little men, lest you become one.

Posted by: Miss_Hogynist | March 30, 2009 7:11 PM | Report abuse

At the moment, with "White House Cheat Sheet: Obama Plays Hardball on Autos" being the topic atop the fix, and a photo of Chris Cillizza above that, Chris looks as though he just swallowed a canary, and Obama looks like he just took a bite of sauerkraut and sneezed while keeping his mouth shut.

Posted by: Miss_Hogynist | March 30, 2009 6:39 PM | Report abuse

where's Lee Iaccoco?

Posted by: TheBabeNemo | March 30, 2009 6:18 PM | Report abuse

We hand-deliver wheelbarrows full of money to the empty suits at financial giants like AIG, and treat GM like an old shoe. (Chrysler actually *is* an old shoe, but that's another story). There are two explanations I can think of for this discrepancy, and neither bodes well for those who depend on income from their labor to feed, clothe and house their families, and to obtain medical care.

The first explanation is that we're a late-stage capitalist giant about to go down the tubes. We're going through the "financial sector bloat" that happens as manufacturing slowly dies and all that the nation produces is paper wealth.

The second explanation is that the empty suits at the financial giants have such a stranglehold on the US economy that no president dare call them on the carpet. On the other hand, calling for "washing" automakers through bankruptcy that would trash their obligations to their unions is seen as patriotic.

By the way, Mr. Obama, you will not be able to deliver on your central campaign promise of universally available (if not universally accepted) health care if you continue demagogically to try to fund it by rallying the 80 per cent of US adults who do not use tobacco to raise taxes on the 20 per cent who do.



Posted by: Miss_Hogynist | March 30, 2009 5:55 PM | Report abuse


Posted by: mattintx | March 30, 2009 5:46 PM | Report abuse

Does one still send in their car payments to GMAC or directly to the Democratic Party?

Posted by: leapin | March 30, 2009 5:33 PM | Report abuse

A boom built on cheap petroleum would cure the auto industry's ills. While we are in a recession, and now that we recognize that cheap petroleum fuels are history, the entire industry, worldwide, must be downsized, in more ways than one.

The FIAT deal may save Chrysler, but only the Jeep plant in Toledo is probably worth the effort.

Posted by: mark_in_austin | March 30, 2009 4:58 PM | Report abuse

You know what would fix the auto industry? A sales model not based on bartering. Buying a modern, high tech vehicle in the United States should not be akin to wandering a medieval market.

Posted by: hiberniantears | March 30, 2009 3:10 PM | Report abuse

The ideas of how to fix the auto industry is easy. The hard part is getting that lug nut into the 21st century.

I should be able to sit at my computer and

1. Put together the automobile I want that reflects my point of view

2. Qualify for financing

3. Receive my singular choice of transportation within a month or two with "just-in-time" assembly

Every time I have bought a new car over the past 50 years it has always involved the salespeople wasting hours scrambling around to try and find the model, color and extras I want, within a hundred mile radius. Then when they finally realize that I'm not going to settle for something similar to but not quite the simple choices I was able to make, they order me the car I sort of want. Please! For an average of $30,000 people want something tailored and unique to their point of view.

Posted by: PunkToad | March 30, 2009 2:57 PM | Report abuse

I think it does further damage to the US reputation to say a contract is a contract if its in the financial industry and can be broken if its in a smaller industry. I also think its a huge mistake to force out CEO's of the auto industry and leave intact the CEO's on Wall St whose behavior has ruined us all. The US can't climb out of the hole supply side economics has dug for it by engaging in more crony capitalism and protecting the bloated and corrupt financial services sector. Either all must take the pain, or all will keep hurting.

Posted by: realadult | March 30, 2009 2:51 PM | Report abuse

Great news. It's about time someone whopped some heads at GM. Those suits never cared to make any lasting changes. Now they'll have to before receiving any government (translation: our tax dollars) funding.

Posted by: wpreader2009 | March 30, 2009 2:21 PM | Report abuse

What's with the homophobia? That's just . . . oh, gimme a sec, I'll think of the word . . . loony.

Posted by: mattintx | March 30, 2009 2:20 PM | Report abuse

Now that the loony-left liberal d-crats have taken over GM, here are the top ten features that every new GM car will have:

1. It runs only on biomass fuel, i.e. hot, steamy piles of d-crat BS (an infinite and unlimited "resource")
2. It has dainty bows and ribbons all over it (thanks to Barney Frank).
3. It will be free to society's slugs and slackers, but all hard-working American citizens will pay triple the actual cost (per hussein's "wealth re-distribution" plan.)
4. It doesn't need insurance, since each car comes with a dedicated trial lawyer to sue the sh** out of everyone for everything related to the car and its use (thanks to adulterer trial lawyer John Edwards).
5. It costs four times what other cars cost, since it can only be built by d-crat-supporting union personnel with excessive salaries and generous medical benefits. The car must be built using three union members to do the job a non-union person could do.
6. The car makes only extreme left turns.
7. There will be a union-dues fee attached to the price which, as usual, goes directly to the d-crat party.
8. The car has 20 Straw Holders for those who also enjoy the favorite nose candy of TheOne.
9. The car has a voice response system, but it only speaks and understands illegal immigrant spanish.
10. You can get it in any color you want, so long as you want black. It will be a hate-crime to re-paint it any other color.

Posted by: LoonyLeft | March 30, 2009 1:59 PM | Report abuse

The auto industry is so inbred I have no doubt their turnaround plans had issues, but what I don't get is the insistence by the administration that GM and Chrysler focus on low-margin, fuel-efficient small cars. No doubt they should eventually be competitive in this area, but Honda has over a hundred day backlog of Civic hybrids and a 84 day backlog of regular Civics. Toyota is offering cash back on the Prius and has no shortage of fuel efficient cars sitting on their lots. Nothing is selling. GM and Chrysler are in trouble not because they concentrated on SUVs (though that isn't helping), but because they had no cash reserves when the sales stopped last year.

If the administration is going to insist on dictating the type of car they have to make, then they should at least back it up with a floor on gas prices. Phase in a gasoline price floor with a target of $4/gallon on the same date that these new vehicles would be ready for sale. Otherwise the government might as well just nationalize them.

Posted by: caribis | March 30, 2009 1:45 PM | Report abuse

I mean, seriously Chris, that picture makes you look clueless!

Posted by: hiberniantears | March 30, 2009 12:49 PM | Report abuse

What's the deal with your new picture? The awkwardness of that pic is redonkey kong humunculus.

Posted by: hiberniantears | March 30, 2009 12:46 PM | Report abuse

Obama has opened himself up to criticism of both too much government oversight of private industry by ousting Wagoner and a misstep in rebuffing more efforts to save GM and Chrysler. This is a very bold move.


Posted by: parkerfl1 | March 30, 2009 9:54 AM | Report abuse

so another so-called story about Biden's daughter alledgedly doing coke. Horrible video, can't tell if it's her, don't know how old it is, don't care. But of course you had to mention it Chris, even though the source is NYPost, a tabloid at best. This is your idea of news analysis?

Posted by: katem1 | March 30, 2009 9:17 AM | Report abuse

so another so-called story about Biden's daughter alledgedly doing coke. Horrible video, can't tell if it's her, don't know how old it is, don't care. But of course you had to mention it Chris, even though the source is NYPost, a tabloid at best. This is your idea of news analysis?

Posted by: katem1 | March 30, 2009 9:17 AM | Report abuse





Google it.

YOU -- or someone close to you -- could be the next victim.

Unless Team Obama -- especially AG Holder, SecDef Gates, SecDHS Napolitano, SecTreas Geithner -- take down the draconian Bush-Cheney extrajudicial punishment network...

...an array of secret "programs of personal financial destruction" and government-funded vigilante "community stalking"...

...coupled with the proliferation of mind- and body-degrading "directed energy" microwave radiation weapons -- the Zyklon-B of a grassroots, government-enabled American Gestapo.

Attorney General Holder, you must act NOW to restore human and civil rights in America.

Before the naivete of liberals empowers the saboteurs and Dr. Strangeloves who say "No!" to change.


Where is the civil rights division investigation that victims have demanded?

Or is there "nothing to investigate" -- because the government already knows all about this?


Posted by: scrivener50 | March 30, 2009 9:16 AM | Report abuse

We'll probably never know what size the unsigning bonus was required for GM's Rick W. to be dethroned.

Posted by: newbeeboy | March 30, 2009 9:07 AM | Report abuse


Most farm products do not get subsidies as you indicate in your rant. While corn, soybeans, milk, rice and cotton enjoy hefty subsidies during down times they normally receive very little other times. Sugar while not receiving any subsidies directly enjoyed protectionism from foreign imports so in an off-handed way they do receive indirect subsidies. The majority of agricultural operations receive little to no government help, but even that is a little misleading since cheap corn and soybeans lowers the cost for animal agriculture (corn ethanol has been hurting them lately). However, I would propose that the automotive industry has received subsidies themselves through earmarks and other research initiatives and taxation policies that the average farmer would never see so save me your outrage. I think the Detroit News has written an excellent editorial on the politics of forcing the CEO out. IMHO I think the administration has acted somewhat rashly in demanding the head of the CEO but still offering to give them money. As the editorial in the Detroit News points out who is going to take a job that pays $1 a year, with poor company morale, shrinking market base, and seconding guessing by a bunch of Washington bureaucrats who have never run a profitable enterprise.

Posted by: sltiowa | March 30, 2009 9:04 AM | Report abuse

What about farm subsidies? Farmers get tens of billions. Year after year. Decade after decade. Generation after generation. Where's their viability plans? Where are Congress berating them for being among the biggest employers of undocumented workers? Where's Congress questioning their multitude of tax breaks not available to other industries? Where's the outrage over farmers using taxpayer subsidies to hire high-priced lobbyists to lobby Congress for more corporate welfare? Where's the media stoking public outrage over farmers getting so much in taxpayer welfare that they can afford to restore and race vintage WW II fighter planes at hundreds of thousands of dollars a pop?

And before any shill for Elmer Fudd whines that perpetual taxpayer bailouts are necessary for farmers to survive, consider that New Zealand abolished farm subsidies recently, and the sky didn't fall. New Zealand farmers are doing very well, thank you. This proves that capitalism works down on the farm.

Posted by: Garak | March 30, 2009 8:24 AM | Report abuse

Too Bad he did not do this with AIG , Aig was Bush an Tricky dick chenny personal cash cow .
I would not want to be President after bush an the billerys , its no wonder the repups ran a weak sister like macain , they did not want to win the Presidental election , Obamas a good man , but this is going to be a hard one to fix.

Posted by: msgilfoy | March 30, 2009 8:01 AM | Report abuse

The reorganization in bankruptcy could work if it is a pre-planned short term [finished before retooling for the '10 model year production run] event.

I would expect only the Jeep Toledo plant to survive as a full factory operation on the Chrysler side after a CH. 11.

Posted by: mark_in_austin | March 30, 2009 7:18 AM | Report abuse

sorry to hear that for auto industry.


Posted by: allhappy | March 30, 2009 6:59 AM | Report abuse

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