Obama urges car industry bail-out as Republicans balkDecember 12th, 2008 - 3:50 am ICT by IANS
Washington, Dec 12 (DPA) US president-elect Barack Obama Thursday called on Congress to prevent a collapse of the country’s automotive industry, but Senate Republicans were almost certain to block a legislative deal.The House of Representatives approved a $14-billion emergency loan for the car industry Wednesday night, a move that would keep General Motors Corp and Chrysler LLC out of bankruptcy at least for the coming few months.
Obama, speaking at a Chicago press conference, said the automotive bail-out was vital for the US economy and urged the Senate to follow suit.
“At this moment of great challenge for our economy, we cannot simply stand by and watch this industry collapse”, said Obama, who has not taken an active role in the congressional negotiations.
Passage appeared unlikely in the closely-divided Senate, where a vote may come on Friday. Mitch McConnell, the top Republican in the chamber, came out in opposition Thursday, dealing a significant blow to the bill’s chances.
“We simply cannot ask the American taxpayer to subsidise failure,” McConnell said in a speech before the Senate, criticising the legislature for being selective in its choice of which industries to rescue.
“A lot of Americans are asking where their bail-out is. They wonder why one business would get support over another,” he said.
The bill would create a White House-appointed “car czar” who would oversee the companies’ restructuring and have the authority to revoke the loan by March 31 if not enough progress was being made.
President George W. Bush’s administration backs the deal, but the outgoing president has limited clout with his fellow-Republican legislators.
The carmakers have argued an emergency “bridge loan” is needed to weather the US recession, which has sent car sales to a 25-year low in the past two months.
But many lawmakers blame the industries’ struggles on a failure to streamline production and cut costs over the past decade as foreign competitors gained ground in the US market.