President Barack Obama may or may not be able to save the U.S. auto industry, but his dramatic restricting plan is already having some effect: It’s sent the highly disciplined GOP message machine careening out of control.
Sen. John McCain, the Republicans’ 2008 presidential candidate, accused Obama Monday of “unprecedented window dressing” and said his plan didn’t go far enough. But Rep. Thaddeus G. McCotter, chairman of the House Republican Policy Committee, complained that Obama was being tougher on Detroit than he’s been on Wall Street.
California Rep. Darrell Issa praised Obama for having “struck the right chord.” But Tennessee Sen. Lamar Alexander said Obama’s plan was “not the right direction.”
Ohio Sen. George Voinovich, co-chairman of the Senate Auto Caucus, said he was happy that the White House was “insisting that American auto companies receiving taxpayer dollars can stand on their own two feet eventually.” But Tennessee Sen. Bob Corker called Obama’s plan “a major power grab by the White House” that would leave the federal government with almost complete control over General Motors.
For a party that was all but united in opposition to the Democrats’ stimulus plan and the president’s budget, the Detroit disarray was striking — and understandable.
Two factors undermined any attempt at a unified GOP response: parochialism and timing.
Midwest auto state senators like Voinovich felt like they had to back Obama’s restructuring for Chrysler and General Motors, while Southern senators like Corker, who has significant foreign auto manufacturing interests in his home state, don’t like the preferential treatment they think Detroit is getting.
And it didn’t help that the Republicans were caught by surprise.
By the time lawmakers learned of Obama’s plans in a White House conference call Sunday night, the media were already reporting that the Obama administration had asked for the resignation of GM Chief Rick Wagoner — and gotten it.
One senior GOP Senate aide acknowledged that Republicans were caught flat-footed. And because many lawmakers were traveling back to Washington Monday after a weekend away, they didn’t have much of a chance to formulate a unified response.
On the other side of the aisle, Democrats — including some reluctant Michigan lawmakers — universally praised the Obama plan and heralded the GOP split as a sign that the auto deal was working, at least politically.
“Midwest lawmakers will howl, as should be expected given the impact on their constituents,” said one Democratic aide. “But this is not necessarily bad for Obama as it reinforces that he is being tough here. They won’t be able to figure out how to play it since the president is serving up such tough love.”
Republicans did agree on one thing — they were uncomfortable with the idea that the White House was ousting Wagoner, the CEO of GM for the past nine years.
“If, in fact, Wagoner resigned because somebody in government said, ‘You have to resign,’ then I think we have nationalized the auto industry, at least GM, and I think that’s bad to have the government have a socialized car industry,” Sen. Chuck Grassley (R-Iowa) told POLITICO.
But even Grassley — who famously ranted about bailout recipient AIG “sucking the t-- of the taxpayer” — seemed somewhat conflicted about what the government should be doing to bailed-out automakers. “Now, I don’t want to back away from things I said about AIG — like you’re sucking on the taxpayer,” he said. “There is some responsibility you have to the taxpayer.”
But lawmakers from auto manufacturing states questioned why their industry was getting such tough treatment from the Obama administration while Wall Street bailout recipients have not. “Mr. Wagoner has been asked to resign as a political offering despite his having led GM’s painful restructuring to date,” said McCotter. “Mr. Wagoner has honorably resigned for the sake of his company’s working families. When will the Wall Street CEOs receiving TARP funds summon the honor to resign? Will this White House ever bother to raise the issue? I doubt it.”
After sending out a stew of mixed messages on the auto deal, Republicans also tried the “I told you so” line of attack.
“The administration says these reforms must now be taken seriously or the taxpayer bailouts will end. While that should have happened tens of billions of dollars ago, we agree that it’s time to get serious,” said Senate Minority Leader Mitch McConnell.
Several Republican aides pointed out that back in December, Sens. John Ensign (R-Nev.) and Richard Shelby (R-Ala.) introduced an amendment that would have forced auto companies into bankruptcy and provided them with $25 billion in federal loans.
The Obama administration’s plans do not force the companies into bankruptcy, but Obama left open the possibility of a managed bankruptcy process in comments made at a Monday news conference. And Corker told reporters that administration officials said a fast-track restructuring under the U.S. Bankruptcy Code looks increasingly likely if GM fails to reach an agreement with bond holders and unions.
Like other auto-state members, Corker first learned the details of the Obama plan in the Sunday night conference call. Sen. Carl Levin (D-Mich.), who participated in the call, said there was no opportunity to change the president’s mind about Wagoner, since Obama already had his mind made up about the matter.
“He didn’t ask us about it; he informed us,” Levin said.
Manu Raju and Anne Schroeder Mullins contributed to this story.
