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 Automakers Bailout Up in the Air - Air Force One Press Gaggle by Dana Perino 12/12/08 — Friday, December 12, 2008 —  Q Will you start using TARP money now? Are you going to direct the Treasury --MS. PERINO: I didn't say that. I didn't say that. I said that given the current state of the U.S. economy, we'll consider other options if necessary, and I said including use of some of the TARP; that's one of the options. Q How soon -- walk us through his thought process right now. Who does he need to talk to first? What decisions need to be made before he decides -- MS. PERINO: He's in regular contact with all of his economic advisors. And so we'll be weighing all of the options and making decisions as soon as we need to. Q How soon does he feel he needs to make a decision? MS. PERINO: We didn't discuss that. I mean, obviously we have talked about he urgency of the situation. We have been pushing to get this done; we wanted to get it done last night. Both Congress and the -- the House and the Senate had bipartisan majorities supporting our approach, but they didn't get it over the goal line. And so we have to consider what other options we would take. But I don't have a time frame on it. Q Are you basically saying that you are going to make the decision -- it's not Congress now? I mean, basically, you are going to make the decision on what to do -- MS. PERINO: Congress spoke. Congress spoke last night. They don't have the votes to do anything, despite having majorities in both the House and the Senate supporting a reasonable approach that we put forward. We thought that the legislation could have even been improved. We thought that senators were making good progress last night and talking about the Corker amendment. But again, it just -- it didn't get the votes that it needed to pass the Senate. They needed 60; I think they had 53. Q You mentioned the use of -- you mentioned TARP funds as one option. Are there any other options? MS. PERINO: We're going to weigh all options. I mentioned TARP, as that's been something that you all have been asking about for weeks. And it's just one of the options that's out there, sure. Q Can you describe the other options? MS. PERINO: No. Q Is the Federal Reserve -- cash from the Federal Reserve an option? MS. PERINO: I don't know. Q Will the decision be made this week? I mean, it's Friday today. Or is next week -- MS. PERINO: I don't know. Air Force One | Automobile Industry | Congress | Legislation | Democracy | President Bush | Press Gaggle | TARP | White House Press Corps Labels: Air Force One, Automobile Industry, Congress, Dana Perino, Legislation, President Bush, Press Gaggle, TARP, White House Press Corps
Posted by White House Press Corps @ 9:45 PM  Banks vs. Automakers - White House Press Briefing by Tony Fratto 11/24/08 — Monday, November 24, 2008 —  MR. FRATTO: Yes, Mark.Q Tony, in Lima over the weekend, President Bush spoke at length about the importance of free markets. Why don't all these bailouts undermine free markets by keeping troubled, distressed companies from failing? MR. FRATTO: Well, not at all. I mean, what these efforts are doing are to prevent the financial system from failing. It's never been about any one particular company. We let thousands of companies fail in this economy every year. It's a -- actually, an important part of a healthy company is to have companies competing against each other, and some of them fail, and the winners win, and that's good. But when you have systemically large companies that can bring down not just the entire U.S. financial system but the global financial system, and have a devastating effect on our broader economy, the government has to step in. And so we have an obligation to preserve that very important part of our economy, and that supports the free market system. Our firms can't get out there and do trade if they don't have trade financing. Firms can't get out there and distribute funds to their -- to companies who distribute products here and around the world if they don't have overnight credit financing. So that part of our economy is critical. We need to keep it in place; we need it to be strong; we need it to fill all of the holes in our economy that need financing in order to be able to do their business in a free and open economy. Q What guarantees do you have that they will do that, in terms of lending? MR. FRATTO: That they will lend? That's the business they're in, and the banks have no -- Q That may be, but they're not doing it. MR. FRATTO: Well, look, I think we're pretty confident in the guidance that we've given to banks to get out there and lend. They actually have been lending. They've had to shore up their balance sheets to make sure that they're in a good position. But banks only make money one way, and that's to be out there lending and making loans. Now, it's a very difficult economy we're in right now, so there's a question of the demand side of people requesting loans from banks also and whether there are good bets out there. We want them to make good business decisions. But banks are only in the business of lending, so they can't be profitable companies going forward unless they are looking for opportunities to lend. Q Why don't we help the automakers? MR. FRATTO: We are helping the automakers -- or at least we have a plan to help the automakers. We had a bipartisan agreement on the floor of Congress -- well, actually, it never made it to the floor because the Democratic leadership decided not to bring it to the floor. But we had a bipartisan agreement that we believe would get bipartisan support. It was for $25 billion in the loan program that would have freed up that money in a way that would support the automakers in their efforts -- to help to support them as they become viable firms, because these are important parts of our manufacturing base. We want to see the automakers succeed. There seems to be some misconception out there that we don't want to help the automakers. We do want to help the automakers. We had a bipartisan agreement to do just that, and we believe that's where those funds should come from. And by the way, the news overnight where -- this was a relatively unexpected effort by Treasury and the Fed. If you had said two weeks ago that they were going to have to take this action for Citibank, I think that would have seemed unlikely. This is a very dynamic situation we're dealing with, and the financial system is still fragile. But that also speaks to the need to preserve the funds in the TARP for their intended purpose. We don't need to be taking funds out of the TARP program for other purposes -- and with respect to the automakers, especially when we have a $25 billion loan program that was specifically set up for their use. Q Well, what's the hang-up? Is it because the money is coming out of the -- MR. FRATTO: That's a question for Congress, Helen. The money is there; we tried to work on both sides of the aisle to design it in a way that the automakers could access it and to help them move forward and be viable. So I would put that question to the Democratic leadership of the Congress. Automobile Industry | Economy | Press Briefing | TARP | Tony Fratto | White House Press Corps Labels: Automobile Industry, Economy, Press Briefing, TARP, Tony Fratto, White House Press Corps
Posted by White House Press Corps @ 6:33 PM It's a TARP! - White House Press Briefing by Dana Perino 11/18/08 — Tuesday, November 18, 2008 —  Q Congressman Hoyer says he is hopeful that the Democrats can reach a compromise with the White House on aid to automakers. Does the White House believe that such a compromise can be achieved this week, or are you beginning to see this as something that's going to have to be left for -- to be worked out with the Obama administration? MS. PERINO: Well, of course we remain hopeful that we can find a bipartisan solution. We think that we already have a bipartisan solution, because we have legislation that's already on the books, where money has already been appropriated to help automakers through the DOE loan program, 136 loan program. We've already put forward regulations that would guide how that would work. What we're simply saying is that maybe we can work together to amend that process so that companies that can prove viability could take advantage and have that money sooner if they need it during this rough patch. The House and Senate are in today, but they're having hearings. I think tomorrow you'll probably see a little bit more action once they're able to bring something to the floor. We still don't know exactly what they would bring to the floor. But we think that we have a solution here that is very logical and very reasonable. Perhaps it's so logical and so reasonable that people really just can't get their arms around it, because it's Washington, D.C. But we think that we have a path forward. And we'll let you know as we continue to work with members of Congress whether or not we can forge an agreement. We hope to do so this week. Q When you say "amended," do you mean amended so that it is not required to be used for fuel efficiency? MS. PERINO: Right, that those funds would be freed up and that they could use those funds for other things. That does not mean that we are relaxing any standards when it comes to fuel efficiency. President Bush proposed the changes that we are starting to implement now; Congress finally passed them. And we have a chance now to really improve the fuel efficiency of these vehicles. What we're saying is that the Congress already passed $25 billion for the auto industry so that they could retool their factories and meet those standards. They're still going to have to meet those standards, but if they need that money sooner and need it for other purposes, we're saying simply amend that bill and allow that money to be used for other things. And if in the future they decide -- the next administration and the Congress decides to add additional funds to help the automakers to meet those standards, that will be up to them. We just don't think that we should provide the $25 billion that was already on the table, plus an additional $25 billion, unless companies can show us that they have a long-term path for viability. Q So, Dana, is the primary sticking point, then, just the source of the money? If it comes from TARP, you don't like it; but if it comes from the Department of Energy, you do like it? I mean, does the White House completely agree that automakers do need and deserve this money? MS. PERINO: We want the automakers to succeed. There is a pot of money that exists, it's there for the taking, it's on the table. And we think that a simple amendment to the law that has already been passed to allow them to be able to use these funds is the best way for us to be able to help the automakers right now. And so we're going to try and help them do that. We don't think that these funds should be taken from the TARP. That was never the intent of Congress. That money is specifically for the financial industry, to help prevent collapse in our financial system. And that's what Secretary Paulson and Ben Bernanke are talking about this morning on Capitol Hill. Q So that's the only difference is that you don't like one source and they like a different source? I mean, I don't really see -- it seems like that is very close to an agreement. MS. PERINO: It's a significant difference. Well, it's a significant difference when you're talking about which pot of money to use, because we want the money that has already been appropriated, that we have rules that govern how it would be used. We also went through the process of rushing through, but doing it in a proper way, the rules of the road to prove viability that's defined in our legislation. What the Democrats put forward yesterday is a proposal that fails to require automakers to prove viability. We don't think that taxpayers should be asked to throw money at a company that can't prove that it has a long-term path for success. That's a key difference between us and them. Bret. Q Isn't it true that they want both? They don't one or the other, they want both. MS. PERINO: Right, they want the money that's already been appropriated and they want an additional $25 billion, which we think is unnecessary and unreasonable at this point. Automobile Industry | Congress | Dana Perino | Legislation | Press Briefing | TARP | White House Press Corps Labels: Automobile Industry, Congress, Dana Perino, Legislation, Press Briefing, TARP, White House Press Corps
Posted by White House Press Corps @ 6:39 PM TARP Cover for the Auto Industry - White House Press Briefing by Dana Perino 11/17/08 — Monday, November 17, 2008 —  Q You've repeated over the last 10 days your opposition to funding anything for the auto industry out of the TARP program. Are you opposed to Congress amending that so that monies in that program could go to the auto industry? MS. PERINO: I don't think we think it would be necessary to do so when we already have a program with monies, $25 billion, appropriated specifically for the auto industry. The TARP funding is there for financial institutions. It was -- Congress never intended for individual industries to be able to come forward to -- Q And what if they change their mind? MS. PERINO: Well, I think that what they should be able to do is -- look, there's not an appetite in Congress, or in the administration, to open up the TARP funding for individual industries, because once you start down that road, it's a slippery slope to other industries that might say that they need help. But we do have an entire pot of money, $25 billion, that the auto -- that is specifically for the automakers. And we also know that opening up the TARP will not get through the Senate. Therefore, to avoid partisan gridlock, what we are recommending is to work hand in hand on a program that would simply amend the 136 program and help companies that can show long-term viability and a willingness to restructure. Q Would you guys veto? MS. PERINO: I think it's too early to say since we haven't even seen their legislation. It's too early to say. Q Dana, on that viability point, regardless of where the money comes from, whether it's TARP or the Department of Energy, it's still taxpayer money. Is that a good investment? Are the automakers a good investment? MS. PERINO: Well, I think that's another thing to remember, which is that the TARP program was specifically designed to help taxpayers get a return on their investment. This is monies that we are investing into companies. We are providing capital. And it has to be paid back. There is no direct subsidy that we are suggesting in the TARP. The Treasury Department has been making decisions based on what they think will at least make the taxpayers whole, if not help us get a return on that investment. When we're talking about the auto industry, and while we haven't seen the Democrats' proposal yet, it doesn't seem that would be the case, that the taxpayers would actually be paid back. But when we're talking about viability, what we mean is that a company needs to be able to show that they have long-term plans, so that they will be on -- have sound financing, and not have a vicious cycle of getting back into this situation again. One of the reasons that we agreed to go forward with the 136 program was to allow the companies to have access to a stream of funds to help them retool their factories so that they could build more fuel-efficient cars, which is what consumers of today are looking for. But in addition to that, the automakers have over time made some decisions based on their needs for their employees, and some of those decisions might have to be reworked, going forward. So they're going to have to be able to show how they can survive. If you look at their ability to compete worldwide -- we think that our companies can compete, but they're not going to be able to do so unless they make some of these really tough decisions. Q So are you saying they should get rid of pensions or health care provisions? MS. PERINO: It's going to be up to the companies to decide how best to -- how they can best compete in the world and show viability. We're not going to get into dictating that. Q But are you willing to let one or all of these three big automakers go under? MS. PERINO: Our position is that we want these companies to succeed. We have figured out a way to provide them funds so that they are able to do that. And we think that there is a bipartisan path that we could get this done very quickly this week and avoid that. Q But at the same time that you say that, you also are saying that they don't measure up to the viability standard, which -- MS. PERINO: But they might, and they might -- and if they can show that they can have a long-term -- that they have a long-term plan so that they are viable, then that would be taken into consideration. Q And so what is the next move for the administration to, you know, close the gap between you guys and the Democrats? MS. PERINO: Well, we're waiting for them to get back in town. We're waiting -- we haven't even seen their proposal. They've talked sort of around a proposal this week, but until we see it, it's really hard to react to it. And then we'll continue to work with our Republican colleagues as well to see if we can forge an agreement and get something done early this week. Automobile Industry | Congress | Dana Perino | Economy | Press Briefing | TARP | White House Press Corps Labels: Automobile Industry, Congress, Dana Perino, Economy, Press Briefing, TARP, White House Press Corps
Posted by White House Press Corps @ 6:55 PM
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