Kyl Reasserts Opposition to Auto Bailout

Posted December 4, 2008 at 6:44pm

In the face of public opposition to a government bailout of the auto industry, Senate Minority Whip Jon Kyl (R-Ariz.) took the unusual step Thursday night of having his staff circulate an e-mail to his Senate colleagues denying media reports that he supports a multibillion dollar rescue package.

Republicans blame a number of their electoral defeats last month on a number of GOP lawmakers backing of the $700 billion package for U.S. financial markets, and House and Senate Republicans have become increasingly gun shy about being linked to further government spending on failing industries.

In an e-mail to the chiefs of staff to the other 48 Members of the Republican Conference, Kyl said that while a Wall Street Journal story accurately quoted him, its headline indicating he supports the bailout is incorrect.

“Several offices contacted my staff earlier today inquiring about a Wall Street Journal article entitled, ‘Senators Kyl, Corker, Warm to Detroit Bankruptcy Plan,’” the e-mail said.

“Although the article accurately quoted me, the headline creates the misimpression that I would be open to financially supporting the automakers outside of Chapter 11 bankruptcy … I want to use this e-mail as an opportunity to reaffirm my position that no federal aid be provided to the automakers outside of Chapter 11 bankruptcy,” the e-mail continued.

In the article, Kyl says that he would support some type of bailout for automobile manufacturers that file for Chapter 11, arguing that given the economic crisis, the companies and unions cannot be expected to make the changes on their own.

“I’d be happy next week to pass a bill that said for any of these three companies that go through Chapter 11, we will provide a certain amount of [debtor-in-possession] financing,” Kyl said, adding: “I don’t believe, in the time we have and the political climate we have, that there is an ability on the part of the unions and the three companies to make the kind of changes that would really be necessary.”