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It is worth mentioning that auto CEO’s did give Congress assurance that they would not use this bailout money to sue states over their emission standards. It is a big about turn for the auto industry – almost everything they have been against now they have to be – for, one of the auto CEO’s did say that they thought electric cars were the way forward – as everyone has a plug – hybrid-electric is a good step, until battery life improves – at the moment we have car batteries that can go 240 miles without recharging – but they are heavy – and they weigh a tonne literally – though there is car battery technology being developed in Japan (always Japan) that is half the weight 450 lbs – their car companies quite sensibly work with the battery companies – the Japanese are also working on bringing down recharging times to about a half an hour.
Environmental groups are disappointed that money put aside to aid automakers to produce more fuel-efficient cars is now going to fund their operations.
Although the bill promises the money for retooling plants will be replenished in the future, environmentalists are skeptical. And they’re also upset the bailout doesn’t ban automakers from suing states that set tougher emissions limits than federal rules.
“We know they need help retooling their factories, and we feel very strongly that if those funds are going to be diverted and not replenished, Congress is walking away from their own commitment to fuel efficiency,” says Phyllis Cuttino, head of the U.S. Global Warming Campaign for the Pew Environmental Group.
The Energy Independence and Security Act of 2007 called for increasing fuel efficiency to 35 miles per gallon by 2020. In exchange for agreeing, automakers would get $25 billion in loans to help revamp their plants. They waited over a year for Congress to allocate the money. Now, some will go to the bailout.
“The funding Congress is considering now is just a Band-Aid, and it diverts funds originally intended to help the Big Three and other companies produce more fuel-efficient vehicles,” says Michelle Robinson, director of the Clean Vehicles Program for the Union of Concerned Scientists. “Those funds should be replenished when the new Congress convenes in January.”
INTERACTIVE GRAPHIC: A state-by-state look at auto industry jobs
What particularly irks environmentalists is that the automakers will continue on their quest to stop individual states from enacting their own emissions rules.
Roland Hwang, vehicle policy director for the Natural Resources Defense Council, said, “The White House has decided they want to hold up this entire bailout bill in order to remove this litigation provision. We’re very disappointed.”
Still, even though they aren’t getting money to increase fuel efficiency, high gas prices have forced the automakers to revamp their lineups in favor of more fuel-efficient cars. As Congress debated the bailout bill Wednesday, Ford showed off its 2010 Ford Fusion hybrid in Marina del Rey, Calif., and said that at 39 miles per gallon, it will be the highest-mileage midsize car.
“We’re going squarely after the imports with this,” says Frank Davis, executive director for North American product. The goal: “not only to compete but lead.” It’s exactly the pitch that Detroit needs to win the hearts of a skeptical Congress and American public, and the environmental lobby. Ford has not asked for loans now. General Motors and Chrysler say they need loans to stave off bankruptcy filings.
While it makes a play for environmentalists, the new hybrid will also be aimed at being a commercial success for Ford. Davis says it should add up to 25,000 sales of Fusions a year. While pricing isn’t set, the hybrid system is 30% less expensive than the last generation, like that in the Ford Escape hybrid SUV.
Ford plans to spend $14 billion in the U.S. on advanced technologies and products to improve fuel economy in the next seven years, it told Congress in the business plan it submitted as part of the bailout consideration. It plans a pure electric sedan by 2011.
Source: USA Today
WASHINGTON (CNN) — The House of Representatives handily passed a bill Wednesday night that would provide up to $14 billion in bridge loans to automakers, but Republican opposition cast doubt about the bill’s fate in the Senate later this week.
The U.S. House approved an auto bailout package Wednesday, but it could hit a roadblock in the Senate.
The stopgap measure, approved by a vote of 237 to 170, is designed to let the new Congress and incoming administration of President-elect Barack Obama craft a long-term solution. It would also give the companies time to negotiate with creditors and the United Auto Workers union on additional concessions needed to stem their ongoing losses.
Thirty-two GOP representatives voted with 205 Democrats in support of the bill while 20 Democrats and 150 Republicans opposed the bill.
In Michigan, the home of the three major U.S. automakers — Chrysler, Ford and General Motors — eight Republicans joined the six Democrats in the state’s delegation in voting for the measure. A ninth Michigan Republican, Timothy Walberg, did not vote.
Seven other Republicans that voted for the bill are from nearby Midwestern states that are also home to auto plants. However, outside of the auto belt, the bailout had little Republican support.
Even Democrats couldn’t come to complete agreement on the bill, with House and Senate Democrats going their separate ways on one of the criteria the “car czar” must consider in determining an auto company’s long-term viability plan.
House Democrats used language requiring that autos meet stricter “applicable” fuel efficiency and emissions standards — which would cover consideration of state standards such as those adopted in California and New York — while the Senate version of the bill calls for vehicles to meet “federal” standards, which are not as high as some state benchmarks.
A Senate Democratic leadership aide told CNN that Senate Republican leader Mitch McConnell told Senate Majority Leader Harry Reid Wednesday morning that the bill would never pass the Senate with the House language.
House Speaker Nancy Pelosi wanted the higher efficiency standard so that liberal Democrats who are not inclined to help the auto manufacturers would feel they had assurances that these companies would adopt and make more fuel-efficient cars, according to House Democratic aides.
However, even if language about the fuel efficiency standards is resolved, Senate Republicans still aren’t likely to flock behind the bill.
“I don’t think the votes are there on our side of the aisle,” reported Sen. George Voinovich of Ohio, one of few vocal Republican backers of the bill.
“It’s not gonna pass right now,” echoed Sen. Richard Shelby, R-Alabama, a fierce critic of the bill.
Voinovich and Shelby spoke after Senate Republicans huddled behind closed doors in the Capitol on Wednesday to weigh the merits of the bailout. Vice President Dick Cheney and White House Chief of Staff Josh Bolten attended the meeting — called “spirited” by one senator — to sell the bill the White House negotiated with congressional Democrats.
Several senators said they were concerned the so-called “car czar,” created by the legislation, would not have enough power to force the troubled automakers to restructure to become profitable.
“I have concerns about the power of the czar,” said Sen. Norm Coleman, R-Minnesota, a moderate who Democrats have hoped would vote for the bill, “that he actually has some real power. And I think that’s a concern a lot of my colleagues have right now.”
“The car czar needs the authority to create a de facto structured bankruptcy. Not consulting. Not calling meetings. He needs the capacity of a master of bankruptcy to force things to happen,” said Sen. Robert Bennett, R-Utah.
Some senators oppose any assistance to the automakers, saying they should file for bankruptcy, but White House spokeswoman Dana Perino pointed out that many lawmakers from both sides of the aisle believe that allowing “a disorderly bankruptcy could be fatal to U.S. automakers and have devastating impacts on jobs, families and our economy.”
“As a result, they also agree we should find a way to foster the companies’ restructuring so that they can become viable and profitable,” she said. “We believe the legislation developed in recent days is an effective and responsible approach to deal with troubled automakers and ensure the necessary restructuring occurs.”
Other senators said they were concerned that the carmakers might never pay taxpayers back for the loans, meant to keep General Motors and Chrysler afloat until they can finalize a long-term viability plan — by March 31, according to the legislation.
GM has said it needs $4 billion by the end of the month to continue operations, and believes it’ll need an additional $6 billion in the first three months of 2009. Chrysler has said it needs $4 billion by the end of the first quarter.
Ford, which has more cash on hand than its U.S. rivals, is not expected to tap into this bailout in the coming months.
Project Would Be the Largest Since the Interstate System
On the heels of more grim unemployment news, President-elect Barack Obama yesterday offered the first glimpse of what would be the largest public works program since President Dwight D. Eisenhower created the federal interstate system in the 1950s.
Obama said the massive government spending program he proposes to lift the country out of economic recession will include a renewed effort to make public buildings energy-efficient, rebuild the nation’s highways, renovate aging schools and install computers in classrooms, extend high-speed Internet to underserved areas and modernize hospitals by giving them access to electronic medical records.
“We need to act with the urgency this moment demands to save or create at least 2 1/2 million jobs so that the nearly 2 million Americans who’ve lost them know that they have a future,” Obama said in his weekly address, broadcast on the radio and the Internet.
Obama offered few details and no cost estimate for the investment in public infrastructure. But it is intended to be part of a broader effort to stimulate economic activity that will also include tax cuts for middle-class Americans and direct aid to state governments to forestall layoffs as programs shrink.
House Speaker Nancy Pelosi (D-Calif.) has called for spending between $400 billion and $500 billion on the overall package. Some Senate Democrats and other economists have suggested spending even more — potentially $1 trillion — in the hope of jolting the economy into shape more quickly.
No v. 21 (Bloomberg) — President-Elect Barack Obama’s transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry’s financial crisis, according to a person familiar with the matter.
A representative of Obama’s team has already contacted at least one bankruptcy-law firm to say that Daniel Tarullo, a professor at Georgetown University’s law school who heads Obama’s economic policy working group, would call to discuss the workings of a so-called prepack, according to this person.
U.S. lawmakers yesterday delayed until December a vote on whether to give General Motors Corp., Ford Motor Co. and Chrysler LLC a $25 billion bailout. GM today said it would idle production at four plants an extra week and return some corporate jets to conserve cash. Automakers could use a judge-supervised bankruptcy to reduce debt and reject expensive contracts.
“It creates the environment to deal with GM’s problems but limits government financial commitment,” said bankruptcy lawyer Mark Bane of Ropes & Gray in New York.
Bankruptcy is just one option being examined. Obama told CBS News’s “60 Minutes” on Nov. 16 that government aid to automakers might come in the form of a “bridge loan,” advanced if the industry could draw up plan to make itself “sustainable.” The president-elect earlier urged Congress to approve as much as $50 billion to save automakers, using the model of Chrysler’s bailout in 1979.
Tarullo referred questions on a prepack to the transition team press office. Team spokeswoman Stephanie Cutter said, “We have not put out anything specific for the auto industry except that something needs to be done immediately.”
GM, the largest U.S. automaker, said it might run out of cash as early as the end of the year and that the risk was even greater by mid-2009. GM Chief Executive Officer Rick Wagoner said this week GM would have to liquidate if it filed for bankruptcy.
The automaker probably has weeks rather than months left before it runs out of money unless it gets federal aid, Jerome York, an adviser to billionaire Kirk Kerkorian and a former GM board member, told Bloomberg Television yesterday.
In a prepackaged bankruptcy, an automaker would go into court with financing in hand after reaching agreement with lenders, workers and suppliers on what each would give up and on the business plan to be followed. The process might take six to 12 months, compared with two to five years if the automakers followed an ordinary Chapter 11 proceeding and worked out agreements under a judge’s supervision, Bane said.
Automakers would have to depend on government financing to restructure in bankruptcy court and probably couldn’t attract private loans until they were ready to emerge from the process, Bane said.
Officials of the three automakers told members of Congress this week that they had studied a pre-arranged bankruptcy, championed by Republican lawmakers such as Senator Bob Corker of Tennessee, before dismissing the idea as unworkable.
A few days before the election, a Democratic strategist privately worried that a Vice-President Joe Biden was destined for a White House career of dissatisfaction and idle-hands mischief.
“You can’t just have a guy like him at loose ends, he’d go crazy,” said a Democratic consultant who knows the affable, bright and mercilessly quotable soon-to-be ex-chairman of the Foreign Relations Committee. “They need to keep him busy. Nobody over there wants him getting into the Secretary of State’s [business].”
Harnessing Biden’s considerable talents and containing his flaws will be an ongoing challenge for Obama. But Democratic insiders say the appointment of tough-guy Rahm Emanuel as chief of staff—and the administration’s need to forge a governing coalition that includes some Republicans—has brought Biden’s upcoming role more clearly into focus: He’ll play the good cop.
The Democrats’ apparent failure to win the 60 Senate seats necessary to halt a GOP filibuster has created the need for inter-party ambassadors like Biden who are practiced at the art of aisle crossing. In his 36-year Senate career, Biden was never considered a bomb-throwing ideologue, and he still has plenty of chits to cash in with Republicans on the Hill.
“He’s probably got more friends among Senate Republicans than John McCain does, and that’s a huge plus for Barack Obama, who is committed to breaking the partisan roadblock of recent years,” said Biden spokesman David Wade shortly before Election Day.
And while Emanuel’s bad-cop reputation may be overstated, all those F-bombs and threats to pulverize GOP incumbents during his tenure of the Democratic Congressional Campaign Committee boss create an opening for Biden, who maxes out on the Mr. Nice Guy scale.
“I really have genuine relationships with Republican leaders in the House and the Senate. I mean, I—I hope this is not self serving, but I’ve gained the respect,” Biden told an Ohio campaign rally in late October. “I’ve been able to literally work with the Republican leaders, of the committees as well as, as well as the Senate,” he added. “And Barack knows that, Barack has served there and sees that… I’m confident that I’ll be spending a fair amount of time [in Congress].”
In an interview with the New Yorker last month, Biden selected a lofty, if somewhat dubious role model: Lyndon Johnson, who plunged into a deep depression when John F. Kennedy assigned him the role as emissary to a Senate he had bullied, cajoled and utterly dominated as majority leader in the 1950s.
Former Nebraska Sen. Bob Kerrey, a Democrat who’s fond of Biden, painted a different picture: “I can see Joe in his room [just off the Senate chamber], smiling, slapping people on the back, making his points, working the members.”
Indeed, Biden told the New Yorker that his style would be more honey than sting: “I have never ever, ever screwed another senator,” he said.
On top of that, Biden could not be more different than the outgoing vice president, who never visited the weekly Democratic caucus lunches in the Senate and had virtually no relationships with the other side of the aisle. It’s unlikely that Biden will ever be caught telling another senator to “Go [expletive] yourself” as Dick Cheney famously said to Sen. Patrick J. Leahy. Unless he’s kidding.
Biden’s best Republican friends in the Senate are centrists, including retiring Nebraska Sen. Chuck Hagel and the top Republican on the Foreign Relations committee, Indiana Sen. Dick Lugar, with whom he’s forged a close working partnership.
Biden is equally popular with some GOP staffers, drawing top-level Republican aides into free-ranging discussion on nettlesome policy problems, even setting up secure computer forums where aides can swap ideas without partisan recrimination, according to a person who participated in one of the chat groups.
The veep in waiting is not a favorite with Republicans hard-liners, though, who still hold grudges over his tough questioning of former Bush Attorney General Alberto Gonzales. The conservative bloc in the Senate remains unified, and could still engineer a filibuster of Obama priorities.
“Joe’s really well liked—and he can be a real stand-up guy—but it’s going to be tough for him,” said an aide to a top Senate Republican, who spoke on condition of anonymity.
“We’re not in the mood to make deals. People like him, sure, but people are going to change their votes on defense or health care or taxes just because Joe Biden’s a great guy?”
Biden may find it even tougher with Democratic senators—thrilled to have one of their own in the White House again—who may want to simply bypass the vice president and forge a relationship directly with Obama.
“He will carve out a role for himself, the problem is that he’s going to have a lot of competition—and it’s competition that won’t be willing to step aside for him,” says Jennifer Duffy, who covers the Senate for the non-partisan Cook Political Report.
Obama hasn’t served a full term in the Senate but he’s got plenty of friends in the Democratic caucus: Illinois Sen. Dick Durbin, the number two Democrat in the Senate, up-and-coming Missouri freshman Claire McCaskill and an ailing but still powerful Ted Kennedy. Obama also has a unique relationship with one of the most conservative senators, Tom Coburn of Oklahoma, with whom he shares a passion for government reform.
Then there’s former Majority Leader Tom Daschle—a well-connected kitchen-cabinet Obama adviser who is likely to play some kind of role in the administration.
But Biden’s biggest competition may come from the president-elect himself.
“Obama already has his own relationships in the Senate so, in a sense, he doesn’t need an emissary,” Duffy adds. “He’s his own go-to guy.”
Obama has gone to great lengths to establish personal relationships with legislators, creating direct lines of communication that will be handy even if he runs into problems with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid.
“Barack’s been seriously keeping touch with the [fiscally conservative Democratic] Blue Dogs and all the other foot soldiers—he’s intent on not making the same mistakes we did,” said a former aide to Bill Clinton, who worked his congressional transition team in the early 1990s. “We thought all we had to do was to keep in touch with the leaders and we left the members and committee chairs alone. That was a huge mistake and it killed us on the health care… Barack’s not making that mistake.”
President-elect holds a briefing laying out his transition plan and plans to resolve the financial crisis.
Democratic Rep. Tom Udall won the New Mexico seat that had been held by Republican Pete Domenici, further bolstering Democratic fortunes in the Senate, wire services reported.
Udall defeated Republican Rep. Steve Pearce in the race to fill the seat left by a retiring Domenici, who served for 36 years in the Senate. According to a recent analysis of the race from the Cook Political Report, “as Democratic presidential nominee Barack Obama’s chances of carrying the state in the presidential contest improved, Pearce’s already long odds of holding the seat for his party diminished and are now nonexistent.”
Obama’s White Burden in Virginia
Source: CQ Politics
The Republican National Committee has taken out a $5 million line of credit to help fund last minute efforts to keep Senate Democrats from winning a filibuster-proof 60 seat majority, according to an official with the committee.
Of the $5 million, $2 million is being directly transferred to the National Republican Senatorial Committee while $3 million is being devoted to coordinated expenditures that began over the last week.
“This effort not only helps fortify senators but it’s good for the whole Republican ticket,” said the RNC official, speaking on the condition of anonymity. “This is an investment in the entire ticket in addition to an unprecedented get out the vote effort.”
With the White House apparently slipping away and House Republicans looking at losses of 20 or more seats, the Senate is being painted as the last, best chance for Republicans to hold some semblance of power within Congress.
Right now, three states are largely seen as near-certain Democratic pickups: Virginia, New Mexico, and Colorado.
The RNC line of credit is almost certain to be spent on a handful of vulnerable Republican incumbents who face varying levels of peril. That list includes North Carolina Sen. Elizabeth Dole, Oregon Sen. Gordon Smith, Minnesota Sen. Norm Coleman, Kentucky Sen. Mitch McConnell, Georgia Sen. Saxby Chambliss, Alaska Sen. Ted Stevens among others.
The decision by the RNC to help fund a series of Senate contest shows that national GOP strategists see the Senate as their firewall in next week’s election.
Will it change things? It’s very hard to know with so much volatility in the environment. But, it does show the RNC is willing to do everything it can to hold strong against the onrushing Democratic wave.
Your Daily Politics Video Blog: Most of the attention is on the presidential race. But there’s also that question of whether the Democrats are going to put together that 60 vote majority in the senate. In today’s episode we look at the 12 top senate races that will determine whether the Democrats will go into 2009 with that filibuster-proof majority.
This should be called trickle down voting – give more and more to the Dems – and the Republicans can wait for the trickle down effect to kick in !!
It would be just like the Republican’s plan for the country – give more and more and more to the wealthiest few – and the average Joe can then wait for the trickle down economic effect to bring benefits to their lives !![Fine print: At times those given more and more simply shift their funds overseas – which may mean that there could be less and less to trickle down to meet the everyday needs of the average Joe.]