Bailout Watch 281: House Passes $14b Bailout Bill

Automotive News [AN} reports that the U.S. House of Representatives has passed H.R. 7321 by a margin of 237-170. Thirty-two Republicans and 205 Democrats approved the measure. The bailout bill authorizes the Department of Energy to loan General Motors and Chrysler $14b (in total) at a rate of five percent for the first five years and nine percent thereafter (until?). The car czar is a go! Under the terms of the legislation, the de facto bankruptcy judge can “compel automakers, their creditors, workers, suppliers and dealers to agree on restructuring for long-term viability– or emergency loans would have to be returned.” Collateral? An equity stake for taxpayers and “go to the head of the line” debtor repayment positioning. Prohibition against payment of stock dividends, no corporate jets, limits on executive compensation, yada yada yada. If they are to return to the Hill to say the magic words (please sir, can I have some more?), General Motors and ChryCo must bend to the will of the car czar by March 31. Or April 30, depending on… the car czar. So where does this leave the bailout bill?

The Canadian Press reports that the fat lady is still doing scales, as Republican senators gird themselves for battle. Or not. Senator Richard Shelby of Alabama and Senator Bob Corker of Tennessee have threatened– but not promised– to lead an open revolt against the bill and G.O.P.’s lame-duck president, who sent in his shock troops to rally Republican support for the compromise bailout bill.

As Bloomberg reports, that particular part of the plan didn’t go so well. “Vice President Dick Cheney and White House Chief of Staff Josh Bolten attended a lunch meeting of Republican senators today. Tennessee Republican Bob Corker said the two officials left the meeting ‘with less support than they came with.'”

As for the controversial requirement that GM and Chrysler drop their participation in a lawsuit against California emissions standards, a provision the White House opposed, the House of Reps sleazed it. H.R. 7321 requires automakers sucking on Uncle Sugar’s teat “to comply with applicable fuel efficiency and emissions requirements.” Does that mean CA’s as well as federal regs? As the Afrikaners say, Ja nee.

Just in case senate Repubilcans get to thinking about messing with the bill’s language, the House Speaker offered a quick reminder how things are done in the nation’s capital. “Nancy Pelosi said that chamber’s members could return although ‘unless there is a real necessity we will not.’ She said any Senate amendments to the plan may prompt another round of negotiations. ‘If they change it, then we may change it,’ the speaker said.”