December 12, 2008

Crapo: Keep Taxpayers Out Of Auto Bailout

Washington, DC - Idaho Senator Mike Crapo voted against the auto financing legislation last night, and is calling for structural reforms for the domestic automakers and their various stakeholders.

"Congress simply has to control its unrestrained appetite for deficit spending," Crapo said. "There is no question that we face a serious threat to our American automobile industry. That industry must be reorganized and made leaner in order to compete in today's world. We are throwing money at a problem that needs a bigger solution.

"During the Senate Banking Committee hearings, I asked the CEOs of the domestic automobile manufacturing companies if they would support the establishment of a powerful federal trustee or czar that has the authority to impose restructuring conditions and to enforce those conditions as a matter of law in exchange for taxpayer dollars," Crapo said. "None of the three CEOs objected to these strong requirements. The legislation that I voted against did not have the necessary authority to force the concessions that long-term viability would require. It would have resulted in just a hugely expensive bail out with no workable restructuring in the end.

"I am very concerned that the short term federal financing that the President and Secretary of Treasury is considering will only be delaying the necessary tough decisions which will inevitably require the additional infusion of tens of billions of dollars with no solutions on the table. The chief economist and co-founder of Moody's testified before the Senate Banking Committee that the Big Three would ultimately need $75 billion to $125 billion to avoid bankruptcy at some point in the next two years," he added.