Whitfield Votes to Protect KY Taxpayers, Opposes Automobile Bailout | News | Congressman Ed Whitfield

News | Congressman Ed Whitfield | United States Representative

Whitfield Votes to Protect KY Taxpayers, Opposes Automobile Bailout December 10, 2008 WASHINGTON - U.S. Representative Ed Whitfield (KY-01) stood up for Kentucky taxpayers already hit hard by the economic recession, voting against a $15 billion taxpayer funded bailout of the U.S. automobile industry today.

"Ronald Reagan once said, 'Government is not the solution, it's the problem,' and in the case of the auto bailout, I could not agree more," Whitfield said. "There are fundamental flaws in the U.S. auto industry that need to be addressed. They simply cannot be resolved by throwing billions of taxpayer dollars at these companies. While I believe we need to find a way to protect the many jobs associated with the industry, Kentucky taxpayers do not need to be footing the bill for a plan that does not provide for the long term viability of the automotive industry."

Whitfield voted against H.R. 7321, the Auto Industry Financing and Restructuring Act. The bill would provide up to $15 billion in emergency bridge loans, or short term loans, to automobile manufacturers General Motors, Chrysler and Ford. While Ford has indicated it is not presently in need of government help, General Motors and Chrysler claim the funds are essential to keeping their businesses afloat for the next three months.

Whitfield pointed to a recent hearing where the CEO's of General Motors, Chrysler and Ford said this current financial problem was the result of four mistakes:

- Agreeing to expensive union contracts;
- Not investing enough in smaller cars;
- Failing to convert manufacturing plants so they could build more than one type of vehicle; and
- Being focused more on profits than long term innovation and financial viability.

H.R. 7321 would provide up to $15 billion in emergency bridge loans to the three automobile manufacturers, but it does not mandate structural changes within the companies to ensure their long-term viability.

The Congressman noted that this legislation would fail to make any of the big three automakers more competitive, making it likely that the businesses would need additional federal aid in the future to stay in business. The automakers face systematic business problems which can only be fixed through major restructuring which is not mandated in this legislation. Without this restructuring, Whitfield said, the government would be wasting taxpayer dollars investing in companies likely to fail.

Whitfield opposed the Wall Street bailout signed into law this fall, citing concerns over government involvement in the financial sector and the effectiveness of the $750 billion legislation. He noted similar concerns today over the auto bailout.

"First the government bailed out the housing industry, then the financial sector and now the automobile industry - where do we draw the line?" Whitfield said. "I believe free market principles and individual choice are what our government was founded on and what are needed now."

The bill Whitfield opposed today was crafted with little to no input from Members of Congress and leading financial analysts; went through no Congressional Committee discussion and markups; and was rushed to the floor of the House of Representatives without sufficient time for analysis and debate. Whitfield said the Wall Street bailout was considered under similar circumstances and, as a result, taxpayers have been left wondering how their $750 billion is being spent and why it does not seem to be improving our economy.

In addition, the legislation would establish a "Car Czar," appointed by the President, to oversee the restructuring of the businesses. Whitfield questioned whether such an appointee would be able to successfully restructure the businesses after the companies' own CEO's were unable to do so.

Back to headlines