Regarding my letter requesting that she *not* support the automotive industry bailout.
[Here's the letter from my Congressman - Lloyd Doggett)
It's important to note (in the kind Senator's letter) that before all this jumped to the forefront in the news media, Congress had already appropriated $25 billion in "loans". The $25-50 billion they are requesting now is on top of that figure.
Tuesday, December 2, 2008
Dear Mr. Tango.Fuego:
Thank you for contacting me regarding the financial state of the U.S. automobile industry. I welcome your thoughts and comments on this issue.
Our economy is facing dramatic challenges. Financial conditions are rapidly deteriorating, creating volatility and uncertainty for businesses, small and large, across the country.
As Texans, we have learned to take responsibility for our actions and being asked to pay for the mistakes of others is something many, including myself, find deeply troubling. While I am a firm believer of free market principles, I also believe that our economy is facing new challenges that if unaddressed, may produce serious unwarranted costs.
On September 30, 2008, the President signed into law H.R. 2638, the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009. This legislation included, among many items, funding to support a $25 billion loan program for U.S. automakers. The loans, which will be repaid with interest, are intended for long-term business restructuring to promote innovative technologies and new fuel efficient products. The Department of Energy, which is administering the loan program, has indicated that the loans are scheduled to be released in 12 to 18 months.
Several weeks after H.R. 2638 was signed into law, executives of the three major U.S. automakers requested Congress provide an additional $25 billion to $50 billion from the Treasury’s Troubled Asset Relief Program (TARP) to support their short-term funding needs. The CEOs of the largest U.S. automakers testified before Congress that their companies are facing a liquidity crisis, and without an immediate injection of capital, their businesses may fail, creating massive job losses across the country.
The domestic auto industry has failed to meet foreign competition, and I do not think taxpayers should have to provide additional money from the TARP to the auto industry. Instead, I have proposed restructuring and expediting the $25 billion Department of Energy loan program to help the American auto industry weather the financial storm and retain their employees across the country. Requiring these prior funds, which are required to be paid back with interest, to be used on long-term expenditures is not the best use of federal resources when these companies are struggling to stay operational. Rather, these funds should be utilized for short-term needs first. I also believe that any government plan to aid the auto industry must include significant taxpayer protections, including restrictions on executive compensation, concessions from the unions, and assurances that each recipient of federal loans is financially viable.
As Congress returns to debate this issue, you may be certain I will keep your views in mind.
I appreciate hearing from you. I hope you will not hesitate to contact me on any issue of concern to you.
Kay Bailey Hutchison
United States Senator
284 Russell Senate Office Building
Washington, DC 20510