Loan for automakers elicits bailout fears

Sept. 10, 2008 at 2:51 PM   |   0 comments

WASHINGTON, Sept. 10 (UPI) -- Members of the Michigan congressional delegation in Washington said a federal loan to the U.S. auto industry is not a bailout.

In question is a second $25 billion loan requested by Michigan's Big Three that could save the companies more than $100 million for each $1 billion borrowed, the Detroit Free Press reported Wednesday.

Last December, lawmakers approved a $25 billion loan package as part of an energy bill that increased requirements for fuel efficiency.

Similarly, in the new package, automakers "aren't going to use this money to pay the bills or keep the lights on," said Michigan Republican Rep. Mike Rogers.

"Too many people are saying Fannie, Freddie and Big Three in the same breath," Rogers said.

Sen. Barack Obama's economic adviser, Jason Furman supported the argument.

"It's not a bailout because this is part of the energy bill," Furman said. "It's not that the auto industry came to Washington. It's Washington came to the auto industry, and it said you have to help make American energy independent," he said.

While many Republicans outside of Michigan seemed hesitant to support the package House Speaker Nancy Pelosi gave the deal her nod of approval.

"It's about jobs, jobs, jobs," Pelosi said.

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