Road Map: Bush, Democrats Face One Final Showdown

Posted November 17, 2008 at 6:38pm

President George W. Bush might be among the lamest of lame ducks, but he may hold the upper hand in one last game of chicken: With the fate of the U.S. auto industry and hundreds of thousands if not millions of jobs on the line, Bush and the Democrats are on a collision course over another bailout.

[IMGCAP(1)]The president and Republican leaders are open to a $25 billion bailout — essentially accelerating loans already pledged for building more fuel-efficient vehicles, but minus the fuel-efficiency part. That proposal has angered Speaker Nancy Pelosi (Calif.), other top Democrats and environmental groups that have fought for years to get Detroit to improve fuel efficiency.

Democrats instead want an extra $25 billion carved out of the $700 billion financial rescue package, tied to a host of new restrictions on the companies, including limits on executive pay and warrants for an ownership stake if the downtrodden stocks recover.

House Minority Leader John Boehner (R-Ohio) came out hard against giving the auto companies $50 billion before first seeing whether $25 billion would work.

And unless one side blinks, General Motors may have a tough time making it to Inauguration Day.

The key action is expected in the Senate, where cloture votes are expected later this week on a broader stimulus package including the auto loans as well as legislation pairing automaker loans with unemployment benefits. The odds of getting 60 votes to cut off debate are doubtful barring a compromise with Senate Republicans.

Failing to pass the bill would then give Democrats a dilemma: They could stick to their guns on tying the cash to fuel efficiency or risk having a bankrupt General Motors on their doorstep just as President-elect Barack Obama takes office.

Democrats acknowledge they could simply give Bush what he wants now and try to restore the $25 billion for plant upgrades later.

“That’s one option,” House Majority Leader Steny Hoyer (D-Md.) said. “You are betting on being able to move it through the Senate. It’s one thing to repeal it, it’s another thing to pass it.”

But Hoyer cautioned that the Democrats still hope to convince Republicans to join their plan.

“We’re not there yet,” he said.

House Democrats could bring their auto bailout bill written by Financial Services Chairman Barney Frank (D-Mass.) to the floor on Wednesday, or they could wait and see if the Senate can reach a deal first. Democrats say their legislation includes a host of taxpayer protections, including tight restrictions on executive pay.

Some Democrats and industry observers doubt whether Bush would really allow the capstone of his presidency to be GM going bankrupt on his watch. And they note that the administration already has the power to bail out the auto companies using the $700 billion package, needing only the stroke of a pen. But Treasury Secretary Henry Paulson has so far rejected doing so, arguing that the bailout should be reserved for getting credit flowing to the broader economy, not to saving a particular industry.

One backer of the Democratic auto loan package also saw hope in the White House not issuing an explicit veto threat should a package reach Bush’s desk.

Paulson and Federal Reserve Chairman Ben Bernanke met with Pelosi and Democratic leaders late Monday afternoon to discuss the economy, the various bailouts and the Democratic push for a broader stimulus package.

And the auto bailouts will be the subject of hearings today and Wednesday, with the chief executives of the Big Three domestic automakers in town to make their push for the cash.

Meanwhile, the environmental lobby will be working to ensure mileage provisions aren’t weakened.

“I don’t think the Democrats should cave,” said Ann Mesnikoff of the Sierra Club. She argued it’s no guarantee fuel-efficiency provisions could be added back next year. “Once you give in, are you ever going to get it back? It’s a risk. … What is that going to mean for achieving 35 [miles per gallon] in 2020 or something beyond that?”

The other major business of the week, of course, lies in leadership elections. House Democrats will huddle today to formalize a leadership lineup that took shape last week. Majority Leader Steny Hoyer (Md.) and Majority Whip James Clyburn (S.C.) will keep their jobs. Speaker Nancy Pelosi (Calif.) is expected to retain her post during a roll-call vote of the full chamber in January.

Democratic Caucus Vice Chairman John Larson (Conn.) is expected to move unchallenged into the Caucus chairmanship that Rep. Rahm Emanuel (Ill.) quit to join the Obama White House. Only Rep. Xavier Becerra (Calif.), currently an unelected member of leadership as Assistant to the Speaker, faces competition. He is favored against Rep. Marcy Kaptur (Ohio) in the race for the Caucus vice chairmanship.

Several Democratic Caucus groups will also meet today to pick their leaders, and there is similarly little drama in those contests.

Rep. Barbara Lee (Calif.) is expected to be elected to head the Congressional Black Caucus; Rep. Nydia Velázquez (N.Y.) will likely secure the top job at the Congressional Hispanic Caucus; Rep. Mike Honda (Calif.) is expected to win another term leading the Congressional Asian Pacific American Caucus; and Rep. Ellen Tauscher (Calif.) is so far unopposed for a third and final term leading the moderate New Democrat Coalition.

House Republicans will vote on Wednesday for their leadership slate, with Rep. Dan Lungren (Calif.) running a long-shot bid to topple Minority Leader John Boehner (Ohio), Rep. Eric Cantor (Va.) set to become Minority Whip and Rep. Mike Pence (Ind.) positioned to become Conference chairman. Republican Policy Committee Chairman Thaddeus McCotter (Mich.) faces a long-shot challenge from Rep. Michael Burgess (Texas).

Senate Democrats, of course, have to decide what to do with Sen. Joe Lieberman (ID-Conn.).

The only other legislative business on the agenda — a Senate package of land bills — has been postponed until the next Congress, when Democrats will have an easier time overcoming a Republican filibuster.