Following the failure of the proposed $14 billion Detroit Three bailout in the U.S. Senate, the Bush Administration is said to be strongly considering taking money from the $700 billion Wall Street rescue package as a final resort. The White House worked with Congress over the past several weeks to develop the failed Detroit Three proposal, which appears to be a lost a cause.
“Bush officials warned wavering GOP senators that if they didn’t support the legislation, the White House will likely be forced to tap the Wall Street bailout to lend them money,” two Republican congressional sources told CNN.
Up until now, the Bush Administration and Treasury Secretary Henry Paulson have rejected the idea of tapping into the $700 billion Troubled Asset Relief Program (TARP) to help U.S. automakers. Opponents of the TARP solution argue it would not provide enough oversight, nor would it demand enough of the Detroit Three in terms of restructuring.
“I would only hope that the president, who has worked so well with us for the past several weeks, would now use consider using the TARP money,” said Senate Majority Leader Harry Reid, following Thursday evening’s Senate vote.
While the White House reportedly considers using TARP money to be the “worst option” when it comes to government intervention, it appears even this action might be preferable to inaction.
