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Arlen Specter Speaks on the Floor About the Auto Industry
Washington, D.C.
Thursday, November 20, 2008 -
Mr. SPECTER. Madam President, earlier today, Senators Levin, Bond, Voinovich, Stabenow, Brown, and I announced a legislative proposal to deal with the crisis being faced by the automobile manufacturers. For a protracted period of time, Congress has wrestled with this issue. There have been many conflicting points of view as to what ought to be done. There has been little public sympathy for the plight of the auto manufacturers because they have been on notice for a long while of the need to reorganize and to approach the manufacture of automobiles differently in order to compete with foreign cars. There have been repeated efforts in the Congress to impose mileage standards. Finally, that was done last year. Now, with the severe economic problems facing the country, the automobile manufacturers find themselves in dire straits. The chief executive officers of General Motors, Chrysler, and Ford have been on Capitol Hill with very gloomy predictions as to the future of their companies if they do not get economic aid.
It is a difficult matter to provide economic aid to all those who are in need. It is true the Federal Government has provided economic assistance to Bear Sterns and AIG, turned them down with Lehman Brothers. We are well aware of the fact that there could be very serious repercussions for the economy as a whole if the auto manufacturers fail. There has been considerable talk that they could go into a reorganization and bankruptcy and could emerge. That may well be true. But that could be risky as to what would happen.
The Congress authorized some $700 billion to assist on an economic recovery. That legislation has not been warmly received by the American people. During the month of October, I traveled broadly in Pennsylvania and found very strong public sentiment in opposition. The Congress acted in the face of having our backs to the wall or a gun at our heads or any other metaphor of a critical nature that one would choose.
On September 29, the House of Representatives failed to pass an economic recovery program. Senators were notified to be in the Chamber at 7:30 on Wednesday evening to vote. Regrettably, that legislative process did not follow regular order. It started off with a bill with papers from the Treasury Department. It wasn't a bill. It was a 4-page memorandum, later expanded to more than 100 pages, ultimately to more than 400 pages. But when regular order is not followed, the consequence is likely to be not so good. Regular order requires a bill that one can read and study. It requires hearings before a committee where people are proponents and opponents. There is examination and cross-examination to get at the facts. Then the committee--in this case, the Banking Committee--would sit down and have what is called a markup to go through the bill line by line.
I explain this in some detail so there might be some understanding, if anybody is listening on C-SPAN this afternoon. Certainly, the Chamber is customarily barren, as is frequently the case. Senators are busy with other matters. Then after the markup, the committee files a report. Then it comes to the floor. There is debate, discussion, amendments. Then the Senate works its will. On the House side across the Rotunda, down the hall, the House of Representatives goes through a similar process. Then representatives of the two bodies meet for a conference. Then that is presented to the President. So there is a great deal of refining.
That didn't happen with the $700 billion economic aid proposal. It turned out there was a lot of pork in the final draft that no one had a chance to strike, to offer amendments. It was embarrassing to have to defend that kind of a bill as I traveled my State in October to explain it. So there is great skepticism, fairly stated, among the American people as to the wisdom of the Congress in putting up $700 billion.
Now, with the automakers coming in asking for economic aid, the question arises, who next? Last Friday, I wrote to our leaders urging that we not rush to judgment. I made a similar request, made an extensive floor statement earlier this week on Monday. That letter and others are in the Record, and I will not encumber the Record further because they are available for anyone who cares to look at them.
Secretary of the Treasury Paulson has been unwilling to use the $700 billion to assist the automakers. He may be right about that or he may be wrong about that. But that is the position the Treasury Department has taken, saying that money is for the economy generally.
Then the idea has been proposed--and has been embodied in what Senators LEVIN, STABENOW, VOINOVICH, BOND, BROWN, and I announced earlier today--to use funds up to $25 billion from the 2007 appropriations which had been designated to meet the mileage requirements but not a blank check. Before any of those funds could be utilized at the direction of the Secretary of Commerce, there would have to be a plan. There would have to be a factual statement as to what the condition of the automobile manufacturers is, what would be done with the additional funds, what would be undertaken to guarantee that the moneys would not be used for increased executive pay or corporate jets or golden parachutes. There would have to be some hard, concrete facts laid out.
Last Friday, as I put in the Record this week, I wrote a letter to the chief executive officers of the three companies. I got no response from General Motors. I got no response from Ford. Frankly, I'm a little surprised that when an inquiry is made in that context, there is not an effort to respond, not to reach out but to respond. But executives from Chrysler came to see me, and I raised the questions as to what their condition was, how much cash they had on hand, how much cash they needed, what they would do with an infusion of economic aid, and what were the prospects for a recovery.
That matter has now been put over by the leaders until December 8. So we now have 2 weeks, next week and the week after. Presumably, on the week of December 1, there will be hearings. The automobile manufacturers are going to have a fairly heavy burden of demonstrating that there is a plan which will be viable, which would have a realistic likelihood of success.
I understand the concern of the environmentalists. My record for environmental protection is very strong. But those in the environmental community have raised the concern that the $25 billion ought not to be directed away from changes on gas mileage. We are talking about a bridge loan. The concern is, if action is not taken now before a new administration, that there could be a disastrous result. As Senator Voinovich pointed out, the recession or economic problems could be even more serious. The expression he used, which I think is not inappropriate, it could go over the cliff. Nobody knows. But that is a risk, if we are going to wait until January 20. It may even be a risk in waiting until mid-December, but that is the course which we are on now. Of course, Secretary Paulson has the discretion, as he has conceded, to act with the funds which are now available. But in any event, I believe the legislation which was announced today by the six Senators,--three Democrats, three Republicans, on a bipartisan basis--is a useful approach for the future. This is very important. This is not an extra appropriation. We are not putting up more money. It is a different use of moneys already put up. The environmental issues could be safeguarded after January 20. With the Democrats in control of both Houses and the White House, they could write their own ticket to replenish that fund, if they choose to do so.
But at least we are on a course now in the reasonably near future to provide a legislative approach if--and it is a big ``if''--the auto manufacturers can come forward with a hard statement of facts as to where they are, a hard statement of facts of what they could do with these funds to show their viability.
So we will await those hearings, and we will await what they do. But I would emphasize they will have to persuade the Congress to vote for the plan. But in order to persuade the Congress, they are going to have to persuade the American people over the course of the next 2 weeks with something a lot more specific than they came to town with over the course of the past several days and a lot more responsive than two of the companies not even responding to my request for a statement as to their case, as to how they propose to remain viable with the economic aid.
I thank the Chair, and, in the absence of any other Senator on the floor, I suggest the absence of a quorum.
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