Because the loans were ordered by the administration, rather than mandated in legislation, the money flows first and the repayment terms later are written on paper - literally. - Great terms???? When your giving away other peoples money its easy to give terms like this out! When Congress first passed the $700 billion corporate welfare bill I said it was a blank check written to themselfs and the special interest groups that give them money, and this certainly is a blank check Bush has signed.
Bush hands car keys (auto-industry mess) to Obama
by David Espo - Dec. 20, 2008 12:00 AM
WASHINGTON - President Bush's $17 billion lifeline to General Motors Corp. and Chrysler LLC means neither company will perish while he occupies the White House, yet leaves the ultimate fate of the once-proud auto industry up to the next administration.
A month from leaving office, Bush framed his rescue as "a step that we wish were not necessary," but one that saved the country from a disastrous blow.
It also was one that looked past public opposition, included a key concession of his own and spared a gridlocked Congress the consequences of its own futility.
For that, Bush drew considerable praise from Democrats, Chrysler and GM, the distinctly more tempered appreciation of the United Auto Workers and the scorn of fellow Republicans- all the while preserving complete freedom for his successor to start anew on Jan. 20.
Whatever the terms, targets or requirements of the loans that Bush's Treasury Department laid out, administration officials said President-elect Barack Obama was free to change them at his will.
Because the loans were ordered by the administration, rather than mandated in legislation, the money flows first and the repayment terms later are written on paper - literally.
Obama can ease or toughen provisions in future negotiations.
In a likely harbinger, the autoworkers union became first in line to seek changes.
Bush, no particular friend of organized labor, had wanted the UAW to agree to wage-and-benefit concessions that would make union workers equal in compensation to employees turning out Japanese cars at factories in the United States.
Treasury Secretary Henry Paulson agreed to a change that said the compensation could be competitive, not equal. Objecting was Sen. Carl Levin, D-Mich.
Not yet satisfied, the union's Alan Reuther said, "The UAW believes these provisions unfairly single out workers. They were not part of the agreement that the White House entered into with the Congress. "We believe they should be removed."
It's the type of detail likely to come up again and again as the new administration tries to assure the survival of the auto industry without antagonizing organized labor, a key Democratic constituency.
"I just want to make sure that when we see a final restructuring package that it's not just workers who are bearing the brunt," Obama said.
He didn't say so, but some Democrats have declared Rick Wagoner, General Motors CEO, must go, for example.
It's unlikely any Republicans will be surprised by such maneuvering. After 14 years of controlling at least one branch of government, they soon are to become spectators.
Bush's big concession came when he agreed to help the auto industry with funds from the Troubled Asset Recovery Program, the $700 billion bailout that Congress approved last fall to stabilize the financial industry. He long has said his administration lacked authority to dip into TARP to help automakers.
That insistence crumbled a week ago when Congress gridlocked.
A catch remains, at least as long as Bush's version of the loan remains in force.
Of the $17.4 billion in the loan package, $13.4 billion is available this month and next. The remainder will be used only if the administration is free to tap the $350 billion that is left in the financial-industry bailout fund.
That can only happen if Congress first votes on releasing the funds.