The Bush administration dropped its opposition to using the $700 billion bank bailout fund to provide financing for U.S. automakers after the Senate yesterday failed to approve emergency loans
The economy’s accelerated decline prompted the reversal from the White House, which had insisted money from the Troubled Asset Relief Program be used only for financial firms. GM needs $4 billion from the government by the end of the month to pay its bills, and Ford Motor Co. Chief Executive Officer Alan Mulally isn’t asking for any federal aid now and last week predicted his company could be dragged into bankruptcy by a GM failure
So why these games and why not say that in the first place?
A few quotes might clue us in:
The current weakened state of the economy is such that it could not withstand a body blow like a disorderly bankruptcy in the auto industry," White House press secretary Dana Perino said.
Treasury spokeswoman Brookly McLaughlin said, "Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry".
So, is this just politics, where the Bush administration could shift blame onto the Democrats and come to the rescue of 3 million workers?
Or did someone in that administration realize collapse of the United States auto industry during this time is really not a good thing?