Nov. 8 (Bloomberg) — Democratic congressional leaders urged Treasury Secretary Henry Paulson to use the $700 billion rescue bill passed last month to provide temporary aid to the U.S. auto industry.
House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid sent a letter to Paulson today saying the rescue bill gives him “broad discretion to purchase, or make commitments to purchase, financial instruments you determine necessary to restore financial-market stability.”
Pelosi was among the lawmakers who met two days ago with the chief executives of General Motors Corp., Ford Motor Co. and Chrysler LLC. The three companies are seeking $50 billion in federal loans to help them weather the worst auto market in 25 years, according to a person familiar with the matter.
The letter increases pressure on the administration of George W. Bush to take action as he prepares to hand power to president-elect Barack Obama on Jan. 20. Obama said yesterday that policy options to help the industry will be a “high priority” for his transition team.
The Democratic-led government now wants to buy shares in the auto industry, as if 700 billion for their failed sub-prime mortgage debacle wasn’t enough.
Look for more of this to happen. Everytime a corporation fails due to its own mistakes, government interference, or just the fact that it didn’t succeed in the global market, it will be able to dig deeper into the pockets of taxpayers for salvation.
Welcome to centralized government extortion. Lenin would be proud.