Dodd Says Auto Bailout Lacks Votes in Senate

[Sgent]

Source: NY Times

WASHINGTON — The chairman of the Senate banking committee said on Thursday that he did not believe there would be enough Republican support for efforts to aid the floundering automobile manufacturers, raising doubts about whether Congressional leaders will call the House into a lame-duck session next week.

“Right now, I don’t think there are the votes,” the chairman, Senator Christopher J. Dodd of Connecticut, said, adding that he personally was in favor of using money from the $700 billion financial rescue program to help General Motors, Ford and Chrysler. But Mr. Dodd said he did not believe such a bill would get through the Senate.

“I don’t know of a single Republican who’s willing to support,” Mr. Dodd said. “So I want to be careful about bringing up a proposition that might fail in light of the fact the authority exists, and under an Obama Administration there seems to be a greater willingness to deal with the issue. So there are some political considerations to be made.”

Passing any legislation to aid the auto companies would require 60 votes in the Senate. Democrats and Republicans each have 49 seats, and two independents caucus with the Democrats.

Read more: http://www.nytimes.com/2008/11/14/business/14auto.html

[RoyGBiv]

1. New York Times Death Spiral Watch ...

"Passing any legislation to aid the auto companies would require 60 votes in the Senate."

I'm sending this to Brad DeLong. It's just one more bit of evidence.

[DJ13]

2. You would think the Republicans would be smart enough after the election

..... not to let themselves be associated with the death of Americas last major industry, or with triggering another depression when 5 million auto associated jobs disappear overnight.

That might put the final nail in their coffin as a party.

Something tells me that Dodd and the other Democrats arent pushing this as hard as we thought.

[dothemath]

8. disappear overnight? overnight?

What planet do you live on?
Ever hear of Ch. 7 bankruptcy? Company gets protection from creditors and reorganizes and reubilds.

There will be some jobs lost. They can join the 12 million or so who are now
un- or underemployed, including many who have quit looking because there aren't any jobs to be had.

Sheesh. The dumbing down of America is complete.

[happyslug]

10. Chapter 11 of the Bankruptcy code covers Corporate Reorganizations

Chapter 7 is what most people file, but it is reserved for private individuals. Chapter 11 is where debts can be recognized (and if to much the corporation can be dissolved and assets sold). The problem with Chapter 11 is existing stock holder will get nothing, and that includes the Executives with their stock options (The Stock Options become worthless for the stocks become worthless). Existing debtors of the Corporation generally become the new stock holders, as partial payment of their debts.

Given that much of the top management of the GM hold stock and stock options in GM, any Chapter 11 Bankruptcy will make those stocks and options worthless, thus why GM wants the bailout NOW, for come January 1st, by all accounts, GM runs out of Cash to pay debts. That is the point where GM has to file Chapter 11, something GM Management wants to avoid (The deadline is whenever GM runs out of Cash NOT 1/1/2009, but all indications shows 1/1/2009 is when GM runs out of Cash).

[ben_meyers]

12. A corporation can file a chap 7, but it is rarely used

for a number of reasons, one being that corporations don't get discharges. And that's a long story.

It would seem that the main reason that they are trying to avoid any bankruptcy is pressure from the unions. A chap. 11 filing could negate current labor agreements and subject the unions to court supervised work rules. The airlines use this all the time to restructure their labor contracts. The unions don't want to be in that type of bargaining position.

The Democrats have to listen to the UAW given the amount of financial support that they have received from them, the Republicans, not so much.

[ben_meyers]

11. Actually that would be chap. 11 that allows for a court

supervised reorganization. Chap.7 would be a cessation of business and liquidation.

Now the dumbing down of America is complete.

[still_one]

3. How does this sound dodd, call an emergency session of Congress

and halt all use of the money already allocated until the new administration takes over

They lied and used it for other purposes to what it was agreed upon anyway, thereby violating the original terms

[unkachuck]

4. "Right now, I don’t think there are the votes,"....

....an excuse, lack of strong leadership or just keeping our powder dry?

....all the repugs and probably half the Dems would rather see the auto industry end up in bankruptcy....a convenient way to destroy the Unions with their livable-wage jobs....

[Sen. Walter Sobchak]

16. how much are you prepared to pay to stall the inevitable?

There is a point at which a corporation is so fundementally worthless that it isn't worth saving and the Detroit automakers have been there for decades. Detroit is where it is today because of FORTY YEARS of terrible management and no bailout can save them.

[European Socialist]

5. Who could be more undeserving than the Auto Industry.?

Wall Street. Any industry is more deserving than Wall Street.

[Truth Teller]

6. Unreal

Aiding the automakers isn't an idea I love, but it's a no-brainer.

[MamaDem]

7. Agreed...this is something I'm struggling with but I can't seem to

come up with any othe ridea...nor can anyone else it seems.:shrug:

[goforit]

9. It makes people who voted for Dems want to change their vote!!!

This bail out is going to destroy America.

[high density]

13. Hey Dodd, where's my check for $25 billion?

[dkf]

14. Republicans want big 3 to fail so they can blame the collapse on unions.

Financial Companies don't have unions so Republicans are more likely to bail them out.

[Sen. Walter Sobchak]

15. I just bought my first American made car - a Honda Accord

Ford, GM and Chrysler can go to hell, they have earned their failure.