Bank Bailout funds could Be Used for Bailout

[Lifelong Protester]

Source: CNN Money website

WASHINGTON (CNN) -- The proposal to loan $14 billion to Detroit's struggling automakers collapsed late Thursday night but the Big Three may get some money anyway.

Bush officials warned wavering GOP senators that if they didn't support the legislation, the White House will likely be forced to tap the Wall Street bailout to lend them money, two Republican congressional officials told CNN earlier.

This is a noteworthy change since the White House and Treasury Secretary Henry Paulson have previously refused to use bank bailout funds to help General Motors (GM, Fortune 500), Ford Motor (F, Fortune 500) and Chrysler LLC.

The sources asked not to be named because of the sensitivities of private conversations.

The White House negotiated a deal with Democrats to give Detroit a short term $14 billion loan with strings attached, including a so-called "car czar" charged with helping the companies draw up restructuring plans.

Most Senate Republicans opposed the plan as too weak in terms of focusing long-term viability for the U.S. auto industry.

As part of their full-court press to urge skeptical Republicans to back it, they made clear that if Congress didn't act, the White House would have to step in to save Detroit from collapse with funds from the $700 billion Troubled Asset Relief Program (TARP), according to the sources familiar with the conversations.

"I would only hope that the president, who has worked so well with us for the past several weeks, would now use consider using the TARP money," said Senate Majority Leader Harry Reid, D-Nev., after the vote.

One of the sources said the a White House official made clear to a GOP Senator that would be the worst option, because the loan could go to the auto companies with few or no requirements along with it.

Democrats had pressed the White House from the start to help Detroit by using some of the $700 billion for the financial sector, but the White House had refused.



Read more: http://money.cnn.com/2008/12/11/news/companies/whitehouse_warning/index.htm?postversion=2008121123

[stillcool]

1. I'm speechless...

[Zenlitened]

2. Sorry, no. That money is reserved for important things...

... like luxury spa get-aways, sumptuous banquets, and vacation homes in the Hamptons. :grr:

[roody]

3. rofl!

[Dr.Phool]

4. Don't forget bonuses and dividends.

What good is owning stock in a failed bank or insurance company if it don't pay a dividend?

[AllentownJake]

5. Bush might do the right thing?

:wow:

[Veritas_et_Aequitas]

6. Yes, but I doubt because it's the right thing to do.

It's all posturing. He realizes his reputation's in the tank. If he pushes hard for this he can cling to "hey, at least I saved/tried to save Detroit".

[Cessna Invesco Palin]

14. In this case, he actually might.

My guess is that they're none too happy with Congressional Republicans in the White House right now.

[SpiralHawk]

15. ...while his corrupt republicon cronies in Congress, as usual, do the wrong thing

Republiconthink is a plague upon honesty, decency, and America.

[depakid]

7. If Bush wanted to make a "legacy move"

now would be a good time....

(like that's going to happen).

[bluestateguy]

8. This will be really fucked up if Bush comes out looking like the reasonable one

which is why I am not holding my breath.

[Sebass1271]

9. Wow! he might actually do the right thing for ONCE

DID HE FINALLY look into his soul?

[democrattotheend]

10. No American president wants GM to fail on their watch

Especially his last month in office. Which is why I have some hope that Bush will do the right thing. But I have gotten my hopes up before that Bush would do the right thing, so I am not counting on it.

[whathappened]

16. bush needs help

don't beleave a thing that comes out of dc , this may have all been a setup , to make bush look like a hero on his way out the door , it don't matter much as long as they send the money ,

[safeinOhio]

11. Then what he is saying......

"One of the sources said the a White House official made clear to a GOP Senator that would be the worst option, because the loan could go to the auto companies with few or no requirements along with it."

.....is that there are no requirements on the fricking $700 billion GIVEN to the banks?

[elleng]

12. Right, and the congressional committee

assigned to determine what's being done with the $ can't even BEGIN to figure it out.

[BumRushDaShow]

13. This made me pause as well

considering that Paulson's original 3 page demand for the $ had ballooned to something over 100 pages that eventually passed. But there are apparently alot of loopholes in there.

[Pale Blue Dot]

17. White House may tap Wall Street fund for autos

Source: MSNBC

WASHINGTON - The White House said Friday it will consider using the Wall Street bailout fund to prevent the U.S. auto industry from collapsing after the Senate refused to pass a rescue bill endorsed by President Bush and congressional Democrats.

“The current weakened state of the economy is such that it could not withstand a body blow like a disorderly bankruptcy in the auto industry,” White House press secretary Dana Perino said.

The Wall Street bailout fund is one of the few remaining options for General Motors Corp. and Chrysler LLC, which have said they could run out of cash within weeks. Bush had originally refused to use the bailout fund to help the automakers, insisting that help come from Congress. But the White House said it must reconsider after the Senate failed to agree on a $14 billion rescue plan.

“Congress spoke last night. They don’t have the votes to do anything,” Perino told reporters on Air Force One as Bush traveled to a commencement speech in Texas. “They didn’t get it over goal line and so we have to consider what other options we would take.” She declined to say when a decision would be made.

About $15 billion from the first half of the $700 billion financial bailout remains uncommitted. Treasury in the past two months has pumped out about $335 billion to banks and insurance companies. To begin tapping the second half of the bailout, the administration would first have to notify Congress, which could block it or put new conditions on how the money is used.

Read more: http://www.msnbc.msn.com/id/28166218/

[ohio2007]

18. "Rule by Decree" nt

[napi21]

19. How ironic that would be, for Shrub, as oe of his last actions to be

to effectively tell McConnell & his gang of thieves to go &%^* themselves!

[SharonRB]

20. Not enough to fix his legacy

but it will take some of the nasty taste away right at the end (not much, but some). It's the right thing to do, so I'm not holding my breath that he'll do it.

[PATRICK]

21. They will see

if they can appease the money markets with a "promise" that don't want to deliver and destroy the crowning legacy of the Bush administration in never ever having given a thin dime to the working class for any reason.