Remarks of Senator Carl Levin to the House Committee on Financial Services

Thank you for the opportunity to testify this morning.

When today’s hearing is over and the witnesses return to their struggle to save their companies, the spotlight will be on Congress and our response to the plight of an industry resulting from an economic downturn not of their own making.

The collapse of our domestic auto industry would be – in the words of President-elect Obama – “a disaster” for our economy.

The auto industry is like no other industry in this country. Ten percent of the nation’s jobs relate to the auto industry. The industry accounts for 20 percent of retail sales. Their dealers are on every main street in America, and their suppliers are in most of our states.

So here is where we are in Congress today.

The President says he supports bridge loans to the auto industry. The President-elect says he supports bridge loans to the auto industry. The Speaker says she supports bridge loans to the auto industry. The Majority and Minority Leaders of the Senate say they support bridge loans to the auto industry.

So what is the problem? What are the barriers to enacting these bridge loans?

There is no disagreement over the fact that conditions need to be attached to loans. Everyone agrees that any loans should be accompanied by strong oversight, taxpayer protections and a long-range financial plan outlining companies’ steps to produce energy efficient, advanced technology vehicles and achieve financial recovery. There is agreement that there should be limits on executive compensation, bonuses and golden parachutes.

The problem right now is that there is no agreement on the source of funds for the bridge loans. My preferred course is contained in legislation that Senator Reid introduced Monday to provide bridge loans to the auto industry. That approach would use just 4% of the $700 billion made available in the Emergency Economic Stabilization Act, which, after all, was enacted to restore stability to the economy. The White House says no to that source.

The White House wants to use the so-called section 136 Energy Department funds which we provided earlier to support development of energy efficient, advanced technology vehicles. Some 136 supporters say no to that source.

Folks, the time is shorter than short. People in communities across this country are anxiously watching to see what we are going to do. They are sick with worry. Not acting this week on a solution will provoke anger and frustration in hundreds of communities which supply components or have auto dealers. This is a Main Street issue – a direct jobs issue for millions of families.

I know there is frustration with the past actions of the U.S. auto companies. Blame them if you want to for the quality problems of the 1970’s, or for paying their executives and their workers too much, or for not moving aggressively enough to produce advanced technology, fuel efficient cars. But don’t throw millions of jobs, a vital segment of our industrial base and our economy overboard in your frustration.

We can’t leave here without doing what every other industrialized country is doing – helping our domestic auto industry weather this economic crisis. Are we really going to tell people that the President, the President-elect, and the leadership and probably a majority of the Congress all agreed that we needed to provide bridge loans to support the U.S. auto industry, but we didn’t do it because we couldn’t agree on which of two already appropriated, existing pots of money to take it out of, when the conditions and limitations on the use of both pots can be made the same?

I hope not. The stakes for our future economic security and well-being are enormous. One way or another, this week we have to merge these two paths and provide the bridge loans for the domestic auto industry that the President, the President-elect and leaders on both houses support – for the sake of millions of workers and their future and to keep a recession from being pushed into a depression.

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