Friday, December 19, 2008

Bush Snubs Constitution, Congress, and Passes the Buck

In one of the most glaring examples of "keeping up appearances" in history, President George Bush has decided to single handily provide a bailout bridge to the "Big Three" automobile companies. It is intended to be a bridge that keeps them alive long enough to get to Barack Obama, who is expected to have a more friendly Congress available to do more. The current Congress and majority of Americans are rightly afraid that this is just another bridge to nowhere.

In a brief speech, the President made the case for going against the Congress and using money that was passed for bailing out Wall Street, to be shifted to assist the automobile industry.

He begins by pointing out that money shouldn't be given to the industry without accountability (as proposed by the automobile companies originally), stating that a "more responsible option is to give the auto companies an incentive to restructure outside of bankruptcy -- and a brief window in which to do it. And that is why my administration worked with Congress on a bill to provide automakers with loans to stave off bankruptcy while they develop plans for viability." This bill was rejected by the United States Senate. Bush notes "this legislation earned bipartisan support from majorities in both houses of Congress." There was not, however, enough "bipartisan support" to get this passed.

Bush goes on to say that "unfortunately, despite extensive debate and agreement that we should prevent disorderly bankruptcies in the American auto industry, Congress was unable to get a bill to my desk before adjourning this year." This is a nice euphemism for stating that the bill didn't pass. Period.

Bush states that "this means the only way to avoid a collapse of the U.S. auto industry is for the executive branch to step in. The American people want the auto companies to succeed, and so do I." Maybe some of the people he knows. Maybe his golfing buddies from Ford or tennis partners at GM. But I couldn't find a single national survey that supported such. Furthermore, the American people overwhelming told Congress to not pass this bill. Most were unhappy with the Wall Street bailout, someone needs to be held accountable for their business acumen (or lack of).

In spite of the political realities, Bush goes on to say that "today, I'm announcing that the federal government will grant loans to auto companies under conditions similar to those Congress considered last week." Remember, Congress "considered," but rejected this legislation. Bush is disregarding the will of the Congress, whose authorization should be necessary (according to Article I of the Constitution), and is making the $800 billion bailout for Wall Street into a giant slush fund for the Executive Branch.

The President stated that "these loans will provide help in two ways. First, they will give automakers three months to put in place plans to restructure into viable companies -- which we believe they are capable of doing." When I left Detroit in the 1970s, the automobile industry in that city was already on the ropes and Chrysler was seeking loans. The automobile industry has wasted decades trying to get its house in order. Now, Bush believes it will restructure itself in 3 months? It would be funny if the money wasn't real and he wasn't serious. Well, at least it is only around $15 billion. The second "way" this bill is to help will be "if restructuring cannot be accomplished outside of bankruptcy, the loans will provide time for companies to make the legal and financial preparations necessary for an orderly Chapter 11 process that offers a better prospect of long-term success -- and gives consumers confidence that they can continue to buy American cars." Does Bush honestly believe that Americans will ever have confidence in a company in Chapter 11? President Bush clearly needs a reality check.

Bush states that "because Congress failed to make funds available for these loans, the plan I'm announcing today will be drawn from the financial rescue package Congress approved earlier this fall." Translation: I will take money passed by this Congress meant for one purpse, for purposes that this Congress voted against. This is the arrogance of officialdom and a President behaving like an autocrat.
President Bush simply can't stomach the thought of the automobile industry going under during his watch. In an incredible attempt to protect his "legacy," this President is suspending his Constitutional responsibility, snubbing the Congress who is required in authorizing such expenditures, and is abandoning the will of the people. In an effort to "save face" he is leaving a very ugly memorial to his administration.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

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