Senator Barack Obama and Michigan’s congressional Democrats are pushing for $4 billion in tax credits and loan guarantees to aid the ailing U.S. auto industry. Obama’s office sent a letter to UAW members on Friday that promised this plus tax incentives for customers who choose to buy ultra-efficient vehicles.
“America cannot truly prosper unless Michigan prospers,” Obama said in a Detroit Free Press report. The reasons behind these proposed measures may not be as
“I will provide real solutions necessary to help this industry compete and win in the global economy,” Obama wrote in the letter to the UAW.
A letter sent to Senate Majority Leader Harry Reid by Michigan’s two Democratic senators asked for 3.75 billion in funding for loans, which would translaste to as much as $25 billion automakers and their suppliers could use for updating factories and engineering new models. The funding would cover the government’s borrowing costs, and the U.S. Treasury loans would be made at below-market rates.
A further $250 million would go towards research into advanced batteries for hybrid vehicles.
McCain’s campaign opposes the loan plan, maintaining their proposals would accomplish the same thing. McCain promised customers a $5,000 tax credit for buying efficient vehicles such as GM’s Volt, a $300 million prize for developing the next big thing in electric vehicle batteries, as well and strict goals for building flexible-fuel models.
Another stimulus plan that could reach $50 billion would be pushed for in September, the congressional Democrats said, but the sentiments are not shared by the Bush administration.
