Diary

Big 3 Bailout Unlikely?

Blackhedd has given an excellent analysis of where the Big 3 bailout stands, and why Congressional leaders are having a hard time building support for quick action. It therefore should come as no surprise that House Majority Leader Steny Hoyer is now warning automakers that Congress will not act unless leaders reach a bipartisan agreement in the next few days:

House Majority Leader Steny Hoyer (D-Md.) said on Tuesday that the House will not come back into session next week unless a deal is reached in the coming days to aid the sinking auto industry.

Hoyer gave a definitive response of “no” when asked if the chamber would schedule votes even if Democratic leaders are unable to reach a bipartisan agreement on a multibillion-dollar rescue package for auto manufacturers.

“If we believe that there is a possibility to pass legislation that would lead to continued viability … then we would return,” Hoyer said.

Speaker Nancy Pelosi (D-Calif.) is expected to hold a press event later today to address the issue.

Across the Dome, the Senate is scheduled to come back on Monday at 3 p.m. but Majority Leader Harry Reid (D-Nev.) wouldn’t say on Tuesday whether the chamber would hold votes. He deferred to the Senate Banking, Housing and Urban Affairs Committee, which is holding hearings on the matter this week.

“We hope we can work something out with them, but it’s up to them to show that there will be accountability and viability,” Reid said. “We don’t want to throw a lifeline if the lifeline doesn’t get them to shore.”

Speaker Pelosi is expected to make the final call on whether to return for a lame duck session on Friday. Hoyer’s warning might be setting the stage for Pelosi to announce that the automakers’ recovery plans aren’t good enough to merit tens of billions in taxpayer money, or it might be an attempt to generate more heat on Members who oppose the bailout.

But if the comments of House Democrats are open to multiple interpretations, Reid’s test appears to all but rule out a bailout for Detroit. After all, if the automakers really need between $100 and $200 billion to be genuinely viable, any action that takes place next week will fall short. No one in Congress is even suggesting that much money right now; so there’s no way Congress can take action in the next week ‘to get them to shore.’

Of course, Reid might just be saying something stupid. It’s been known to happen before.