Today, the House Financial Services Committee held a legislative hearing on extending the Department of Treasury's Troubled Asset Relief Program (TARP) to the U.S. auto industry. The draft legislation will extend the recently passed TARP program to help the financial stability of the American car industry.
Chairman Barney Frank:
Rep. Frank:
“We haven’t declared that no one can go bankrupt. We have a criterion. Is this of a magnitude that it will threaten the entire economy and particularly at a time of great vulnerability for the economy? If we were at four percent unemployment, as we were in the Clinton administration, if things were going well, this would be a different thing to contemplate. We have an economy already staggering both because of our credit crisis and problems in the real economy. Adding to this enormous disruption at this point would be an awful idea.”
Professor Jeffrey D. Sachs:
Sachs:
“Please do this before we turn a recession into a depression. That’s my request. You know, it’s for all of us. There’s nobody that will not be affected. And this idea, let markets work when there are no markets, is the idea of how Lehman Brothers triggered the biggest worldwide crisis in a generation. Don’t do it again with this industry. Two in a row, we’re really into depression.”
Chairman Frank and Professor Jeffrey D. Sachs on the Bush Administration proposal to use Sec. 136 funds:
Sachs:
“First, before getting to the specifics of Section 136, we should not ease the conditions. We should see this as an opportunity to enforce the conditions. I actually am more optimistic than the three CEOs that we heard, that they could be accelerated even more, because when you consider that the Chevy Volt promises to be a leapfrog technology, in fact, because we’ll go from hybrid to plug-in hybrid, we’re on the verge, in my opinion, of getting back to U.S. technological leadership. GM also has invested more than $1 billion in hydrogen fuel cells. And Chrysler, I think very impressively, is looking at extended-range electric vehicles. Don’t ease the conditions, that’s for sure.”
Rep. Mel Watt:
Rep. Watt:
“We are in much the same position that we were with the original bailout. We are very much between a rock and a hard place and the hard place is coming from the public out there who has a great resistance to bailing out anybody else, as they did in the original bailout.”
Rep. Maxine Waters:
Rep. Waters:
“I’m still traumatized by the hearing that we had yesterday, and Secretary Paulson’s denial of not paying attention to the loan modifications that we thought we would be getting as a result of the $700 billion bailout bill that we worked so hard to pass. So, on the heels of that, we have here today the automobile companies, and asking for their share of support from the Congress of the United States – from the people, to make sure that they’re able to maintain their businesses.”