As my colleague John Nichols noted, the House passed the $15bn auto-bailout deal yesterday, with little Republican support. It now goes to the Senate where it’s passage appears doomed, according the Times. I feel incredibly conflicted about the deal, but end up thinking that allowing the industry to implode, in a manner not dissimilar to Lehmann Brothers, is likely to be incredibly painful for millions of people. That said, a smart observer who’s been following the legislative wrangling over the issue, writes in to tell me that he thinks this version of the bill is a terrible deal for the Democrats, politically:
Seriously–why are the Democrats walking into this Republican trap? They’re passing a bill that sets March 31 as the next milestone without giving the auto companies nearly enough money to make it to March 31. This 14bn will be gone by Lincoln’s birthday, and then there will need to be additional, emergency, legislation to provide for more capital. Plus, you can’t even just add more money in the stimulus bill next month because the March 31 roadmap, along with car czar, will have already been set by this bill. Pelosi should tell the GOP that they have two choices. Let the automakers fail today on Bush and Paulsons watch or allocate 10bn for GM and Chrysler to get to January when the Democratic Congress will put together a comprehensive package. This current bailout will fail miserably and Shelby will make huge political hay.
We’re once again legislating at the point of crisis, which does not, as a rule produce good policy (cough, TARP, cough), but I really, really, really letting the whole industry die in the next few weeks would be horribly ugly. I think the reader’s second option makes more sense: pare back the amount of money and the timeline, get them through the recess and tackle the issue in the next congress. But it’s unclear that shaving $4 bn off the price will get enough GOP senators to switch their vote. In which case, oy.