The White House and the Treasury gave strong indications Friday that the U.S. government, at least temporarily, would help prop up the American auto industry.
"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," Treasury spokeswoman Brookly McLaughlin said.
And White House spokeswoman Dana Perino said the administration is considering using the Wall Street rescue fund to prevent the USA's strapped carmakers from failing.
While the White House is considering using TARP funds as a stop-gap measure for the automakers, there is "only" $15 billion left in the first installment of the TARP fund. First Read reports:
The Treasury Department tells NBC News that of the first $350 billion installment of the TARP money, $335 billion has either been spent or earmarked and $15 billion remains.
And remember that in order to get the second $350 billion from the $700 billion, the administration must notify Congress. At that point, Congress could simply do nothing and the administration would get their money. The only way to hold it up would be to proactively vote to DENY them the money.
So, if the White House comes in and uses TARP funding for the automakers, it might result in one final, $350 billion spending extravaganza for Paulson and the Bush administration. However, the remaining the $15 billion in the TARP fund would cover the $14 billion legislation voted down last night, and Congress will be able to pass auto legislation as early as January 6th, even despite Republican opposition.
Lots of factors at play here, including announcements that GM will temporarily close 21 factories, most of them through the end of January. I still find it incredibly frustrating that so much is going wrong during this lame-duck session. Republicans seem hell bent on causing whatever final damage they can.
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