The United States Congress today asked the Treasury Department to consider adding U.S. automakers to its $700 billion economic rescue plan. In a letter to Treasury Secretary Henry Paulson, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid called for a “review of the feasibility” of providing “temporary assistance to the automobile industry during the current financial crisis.”
The letter says Congress granted Secretary Paulson ability to use the bailout funds across a number of sectors — not just the financial industry — “in order to restore financial market stability.”
Pelosi and Reid wrote, “a healthy automobile manufacturing sector is essential to the restoration of financial market security.” The letter further states “the overall health of our economy” and the “livelihood of the automobile sector’s workforce” depend on a strong auto industry.
General Motors recently asked the Treasury for $10 billion to acquire Chrysler — a request that was denied. It is believed the Treasury intends to leave the decision on additional help to U.S. automakers until the Obama administration takes power. According to Pelosi and Reid, there might not be enough time to wait. The letter indicates dwindling cash reserves at GM, Chrysler, and Ford “only reaffirm the need for urgent action.”
As with the financial industry bailout, any potential automaker rescue effort would contain the same same “limits on executive compensation” for participants, the letter proses. What’s more, the government would “provide taxayers a return on their investment upon the industry’s recovery.”
