Barring some Christmas miracle, there will be no auto bailout this year.
Progress on a package that would have provided a $14 billion bailout to U.S. automakers stalled Thursday, when Senate Minority Leader Mitch McConnell voiced his opposition to a deal between Democratic legislators and the White House that had passed the House Wednesday night. There was a glimpse of hope Thursday evening as negotiations continued, and at one point Senate Majority Leader Harry Reid even declared, "We're ready to go."
It was not to be -- talks broke down over a Republican demand that the United Auto Workers accept wage cuts that would bring pay at the Big Three U.S. automakers down to what foreign manufactures pay at their non-unionized factories in this country within the next year. The UAW was reportedly willing to agree to the cuts, but wanted to hold off on them until its contract with the automakers expires in 2011. A procedural vote to invoke cloture on the measure and bring it up for a yes-or-no vote was held anyway, but supporters fell eight votes short of the required 60.
The group gathered on the Senate floor after the vote was not a happy one; Reid, in particular, looked tired and dejected. In a statement released by his office, the majority leader chastised the Republicans over the impasse:
Given the unhappy choice between a bridge loan and bankruptcy, Democrats have always believed that we must give the Big Three and the millions of Americans they employ every possible chance to succeed.
By rejecting every good-faith bipartisan compromise -- including those from the White House and Senator Bob Corker -- it is now abundantly clear that Republicans have no interest in keeping the Big Three from collapsing.
Because Republicans failed to act, three million Americans are more likely than ever to lose their jobs and our economy is at risk of suffering even greater damage. Our hearts go out to those families who will now have to deal with this burden as the holidays near.
Republicans may think that rejecting this legislation sent a message to the auto industry. Instead, they sent a message to every single American that they are more interested in settling scores than solving problems.
What happens next is anyone's guess, but the next step for General Motors may well be bankruptcy. If that happens, and the company can't pay its bills, then the companies that supply it with parts, already having troubles of their own, may start to go under as well.