By Stephen Dinan and S.A. Miller
Republicans plan to use the government takeover of General Motors Corp. as ammunition in their bid to defeat congressional Democrats next year saying its a glaring example of big government intrusion into the marketplace that will rankle average voters.
They said the bankruptcy arrangement which President Obama announced at the White House on Monday is doomed to entangle politicians in business decisions that are outside their expertise.
Well continue to make the case that President Obama and House Democrats want to do to Americas health care system what they have done to General Motors said Paul Lindsay a spokesman for House Republicans campaign arm the National Republican Congressional Committee. Having to defend such drastic government intervention paid for with reckless spending and bailouts is not an enviable position for many of these Democrats to be in next year.
Democrats led by the president intend to use the intervention in the election season as well but they expect to promote it as necessary to get the company back on track and to save thousands of jobs. Democrats are also banking on the economy getting better.
Senate Majority Leader Harry Reid Nevada Democrat stressed that he expected the governments involvement to be a short-term stake and said the government will not interfere with day-to-day operations of GM.
President Obamas decision to take a short-term stake in General Motors is driven by our nations shared interest in ensuring the American auto industry can survive Mr. Reid said.
Republicans said they would challenge that notion whenever they found a chance. Sen. Lindsey Graham South Carolina Republican vowed to force a vote to make lawmakers take a stand on the issue. And the topic is already popping up in the hottest Senate race - in which Sen. Arlen Specter switched parties to run as a Democrat in Pennsylvania.
A Republican challenger Pat Toomey said the arrangement - in which the government is pumping $30 billion into GM on top of the billions the Bush administration designated last year - is a bad deal. Mr. Toomeys campaign said Mr. Specter has been conspicuously silent on the latest round of auto bailouts and asked whether Mr. Specter will stand up for taxpayers or will he simply do the Democrats bidding?
Mr. Specters Senate office did not make a statement on Mr. Obamas decision.
In Michigan which has been brutalized by the collapse of the U.S. auto industry Gov. Jennifer M. Granholm said the governments decision to put GM into bankruptcy and to take over much of the company means the worst is about to be over. We can see that theres light at the end of the tunnel she told CNN.
She acknowledged that the states unemployment rate - already the highest in the nation - will increase but said having Mr. Obamas backing of the auto industry and the bankruptcy proceedings is the key to restructuring.
Under terms of the arrangement Mr. Obama announced the U.S. government will name most of the members of a new corporate board and the company will begin to try to build a smaller fuel-efficient car. The company will permanently close nine plants and cut 21000 jobs and 2600 dealerships in an effort to shed unmanageable obligations.
GM filed for Chapter 11 bankruptcy and neither the company nor the administration had a guess as to how long the government will control the company.
Even as he was announcing plans that would lead the government to own 60 percent of GM Mr. Obama sought to put as much distance between himself and GMs future decisions.
I refuse to let these companies become permanent wards of the state kept afloat on a permanent supply of taxpayer money he said.
But Chris Chocola a former congressman and president of the free-market conservative advocacy group Club for Growth said his former colleagues at the Capitol cant resist meddling with decisions about what plants to close or where to locate production facilities.
I dont think theres really any way Congress can divorce the politics from this and thats a danger he said. He compared it to base closings during which members of Congress finally had to take the decisions out of their own hands in order to end the politicking that accompanied the tough decisions.
Thats the danger here is every politician here that has a GM or Chrysler plant in their district is going to scream you cant close the one in my district he said.
Mr. Chocola also said no matter what the government does lawmakers and officials from Mr. Obama down will be blamed for the companys decisions which means ever-increasing opportunities to tick people off.
The government also could find itself clashing with the car companies over environmental issues. The Obama administration has enlisted the bailed-out automakers to support its plan for emissions and federal fuel-efficiency standards. The car companies and state lawmakers had been battling over emission standards for years.
The Workplace Fairness Institute an outside group that is battling a union-sought bill that would make it easier to form unions and create binding arbitration between companies and unions said the GM deal is an example of what happens when the government forces a deal between businesses and unions.
The common thread throughout all these stories is that the workers suffer said Katie Packer executive director of the institute.
Republicans from states with auto-manufacturing plants promised to try to secure government assistance for workers and said they hoped bankruptcy would work to GMs advantage.
In announcing the moves Mr. Obama sought to extend blame to previous administrations. He said his government inherited a financial crisis unlike any that weve seen in our time and therefore the government has had to take controlling stakes in private companies.
He said the survival of the U.S. economy depended on the move. It was the same argument the Bush administration made last year as it urged a congressional bailout of GM and pressured Congress to pass the $700 billion Wall Street bailout.
Still speaking at the National Press Club on Monday former Vice President Dick Cheney said Mr. Obamas new moves were worrisome.
I see the government stepping in and theyre supposedly going to preside over a Chapter 11 process here. Well see how that works. But I do not like the precedent that were setting here in terms of when you get a corporation that big that the government of the United States steps in takes over and begins to operate it and to make judgments that I think are best left to the private sector Mr. Cheney said.
*This story is from the Washington Times
