Panel on the Auto Bill & The Senate

Panel on the Auto Bill & The Senate

FOX News Special Report With Brit Hume - December 11, 2008


SEN. BARBARA BOXER, (D) CALIFORNIA: I have three reasons, three reasons for this rescue package -- jobs, jobs, and jobs.

SEN. JOHN ENSIGN, (R) NEVADA: Chapter 11 exists to protect both the employees and the company itself by giving them a chance to get things right. The big three should not view Chapter 11 as some sort of death sentence.


HUME: Well, those are sort of the two sides in the debate in the Senate, which moved very quickly, it seems today, away from the House- passed rescue measure, with $14 billion in loans for the auto industry, to a proposal by Senator Corker, Republican of Tennessee, which, while unacceptable to a great many Democrats, has nonetheless become the subject of discussions in the Senate late this afternoon and into this evening.

Some thoughts on where we are on all this now from Fred Barnes, executive editor of "The Weekly Standard," Mort Kondracke, same job at "Roll Call," and the syndicated columnist Charles Krauthammer, FOX News contributors all.

Fred, what do you think?

FRED BARNES, EXECUTIVE EDITOR, "THE WEEKLY STANDARD": You have heard me talk bore about the Corker bill. Mort has talked about it as well. It is a tough bill. It is the functional equivalent of what a bankruptcy judge would require.

And what it does with this wishy-washy Senate bill that was actually backed by both President Bush and President-elect Obama and they couldn't get through, what this does is this requires things to happen.

It doesn't say, oh, we'll have a car czar, and he'll sponsor negotiations, and then he'll see if there's progress and blah, blah, blah.

It says you have to get rid of all this - or at least a vast majority of this unsustainable debt that the auto companies have, because you can never become viable or profitable or a company that can ever attract private investment.

You have to reduce your obligation to the pension fund, the UAW pension fund. They will have to accept half of that in stock.

And then, of course, you have to get your wages down to the same level as the transplants, the foreign companies that have plants all over the south.

Those are tough terms, and I think they are negotiating it. If it's not watered down much, I think this is the right recipe.


HUME: Perhaps it passes the Senate, Mort. But the question becomes if something like it passes the Senate, can it pass the House?

KONDRAKE: Exactly. What the Democrats say about this bill is that it is too punitive on the auto companies, that it's harsh and punitive.

And all it, ostensibly, all it does is to make it certain that the kinds of things that are in the House bill will actually happen -- that is, this restructuring for viability, which suggestions that the Democrats who regard it as too harsh don't really want to do what the House bill says it's supposed to do.

I mean, Corker really is the hero in this. He has been negotiating with everybody. The UAW, GM, the administration, the Democrats, and trying to put something together.

And he does not want the companies to go into bankruptcy because he says that the suppliers of all these companies could go under, and they are the same suppliers who supply the transplants as well. So if they go down, then the whole industry is in danger, and so --

HUME: Well, wait a minute. Aren't these, though, the very kinds of measures that a bankruptcy court would put into effect, the kind that Corker is calling for?

KONDRAKE: Yes, they are.

HUME: Why would it cause the suppliers to go under if it was done by a bankruptcy judge but not by this bill?

KONDRAKE: He is afraid that the number of sales that the big three would have would crater, would just -- nobody would buy any of those three company's cars at all.

HUME: If they went bankrupt?


BARNES: They're not buying them now!

KONDRAKE: I think they have sold 10 million cars, something like that, for this year, or that's projected for next year--half of what they normally sell. But they're still selling cars.


Look, if the Senate ended up with a compromise around the Corker proposal, the House would pass it. The reason is this is a gigantic game of chicken. Nobody wants to be left holding the knife with GM and Chrysler dead on the floor.

And what Corker is doing--look, what's really holding all of this I up are real concessions up front from the UAW.

Democrats are protecting UAW and Republicans are trying to get the concessions up front because they are concerned that if a car czar is appointed, his job is to bring all the stakeholders in to negotiations, that the unions will hold out. And when the Democrats are in charge after inauguration day, the unions will be protected in indefinitely.

So what he's try trying to do is to leverage the fact that you have a Bush administration, a Congress that still has enough Republicans who can hold it up in the Senate, and get concessions up front.

I think it is a good idea, because all the other pieces will fall in place. All the ridiculous symbolism of selling the airplanes, the private airplanes, which is, you know, it's show. It is not going to make any difference in the success of the companies.

All this other stuff is going to happen. The dealers and suppliers and bond holders will give in.

It's the UAW, which is a huge constituency of Democrats, which is holding out, and it's a game to see whether they'll concede up front. That's what all of this is about.

And the leverage that Republicans have is that if they don't play games and play ball here and accept this proposal, they will end up in Chapter 11.

BARNES: And there is one other piece of leverage Republicans have, and that is the public does not want another bailout. The public didn't like the first bailout.

HUME: We noticed in our poll tonight, it was clear that not only in the public Democrats and Republicans and Independents all were against it.

BARNES: They were all against a bailout. So if you are going to have one, you need one that you can sell to the public as being-this is, as you say Mort, punitive. It needs to be punitive.

KONDRAKE: What the Democrats are hoping is that the Bush administration caves in the end, that they are so terrified of these jobless numbers that-I'm telling you, this is what they're hoping for, is that Hank Paulson will be driven to use some--

HUME: The financial bailout money?

KONDRAKE: -- of the $700 billion. That's what they're hoping for.

BARNES: He might do that if this falls through, but this may not fall through now.

But Charles is right--the UAW is going to have to give.

HUME: The question is will it?

BARNES: I think so.

HUME: Do you?

KONDRAKE: I don't think so.

KRAUTHAMMER: I think it will hold out, and the administration under Bush will rescue the companies and not allow it to go under under his watch. That's my prediction.

KONDRAKE: So it's a cave on Bush's part.

KRAUTHAMMER: In the end, because he doesn't want to leave it--

HUME: Something has to pass for him to give them some of the TARP money.

KRAUTHAMMER: He won't want to leave a dead industry at the foot of Obama on Inauguration Day.

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