Press Conference with Senator Carl Levin (D-MI); Senator Debbie Stabenow (D-MI); Senator Christopher Bond (R-MO); Senator Sherrod Brown (D-OH); Senator George Voinovich (R-OH)
PRESS CONFERENCE WITH SENATOR CARL LEVIN (D-MI); SENATOR DEBBIE STABENOW (D-MI); SENATOR CHRISTOPHER BOND (R-MO); SENATOR SHERROD BROWN (D-OH); SENATOR GEORGE VOINOVICH (R-OH)
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SEN. LEVIN: We have reached an agreement on a bipartisan approach to provide bridge loans of up to $25 billion to the auto industry. Auto industries around the world, including China and Europe, are requesting loans from their governments because of the dramatic decline of the global economy and the drastic reduction in car purchases and the availability of credit.
Our proposition is not only bipartisan; it is a hybrid proposal combining provisions from many sources. We incorporate Leader Reid's provisions on strong taxpayer protections, including stock warrants for our government; provisions restricting executive compensation, including bonuses and golden parachutes; and provisions requiring long-term plans for financial viability. Suppliers are also made eligible for the loans.
I repeat, our provision requires the long-term plans for financial viability to be presented with the application for the loans.
The language of Chairman Barney Frank of the House Financial Services Committee was heavily utilized, including retention of Section 136's environmental standards, such as the 25 percent improvement in fuel economy and Tier 2 emissions standards. His oversight board membership approach is also included.
The White House opposed the use of any of the $700 billion already appropriated stabilization fund and the majority leader said yesterday that there were not enough votes in the Senate to pass an amendment using those funds. We cannot allow the issue of which source of already appropriated funds will be used for the essential purpose of preventing this economy from sliding into a depression -- which is a real possibility if one or more of the domestic auto companies goes under, given the impact of the auto industry on millions of jobs and suppliers that are in most of our states and on all of our communities which have Big Three auto dealers -- we cannot allow that issue to prevent us from doing what needs to be done, which is to provide these loans promptly to the domestic automobile industry.
So we've agreed that the only alternative, which can prevent those disastrous results, is for the funding stream to come from the -- to come for the loans, from the Section 136 appropriation, which is an appropriation which we've already made.
However the structure of Section 136 is preserved for the balance of its appropriation, not utilized for the loans. And Section 136's environmental standards, including strengthened fuel economy and emissions standards, are also preserved.
Also loan repayments will be used, to replenish Section 136, as well as any proceeds from the sale of company stock that is owned by the government. Another change which was made is, the Department of Commerce will be the lead agency under this proposal.
Now, let me just quickly comment on what you've just heard. Obviously we're disappointed that we're not going to act today. We heard yesterday, there weren't the votes for using the 700 or any portion of the $700 billion stabilization fund. That's what the majority leader concluded yesterday.
We believe there is at least a reasonable chance that if this proposal of ours -- this is a Levin-Bond-Stabenow-Voinovich-Specter- Brown, et al, bipartisan amendment -- we believe that there is a reasonable chance that if this were put to a vote today or tomorrow, that it could get the 60 votes necessary.
However the decision has been made, by the leader, to bring us back on December 8th, after there's been some hearings on the plan. Under our proposal, the plan or plans of the various companies were going to be presented, to the agency which is going to be administering these loans, the Department of Commerce. And they would determine whether or not the required plan would ensure the financial viability of the applicant.
It would be the agency which would make the decision as to whether or not the plan submitted with the application for loans was a plan which, if implemented, would lead to the financial viability of the company. That was something which we said had to be presented to the agency.
What the leaders have decided today is that the plans instead will be presented to the Congress, so that Congress, presumably, in the week of December 8th, would make that decision as to whether or not those plans were adequate or not. That is taking on a huge responsibility from the -- for the Congress to look at details of plans and reach conclusions about whether or not those plans, if successfully implemented, would lead to financial viability. But that's what the leaders decided.
What we decided, in our bipartisan proposal, is that the best approach would be for the agency to look at those plans and make a determination, before the loan was provided, that the successful implementation of the plan would lead to financial viability. It's a very significant difference.
But that wasn't our conclusion. We need speed. This is a very, very important moment. The leaders have taken on a major responsibility in two ways: one, in delaying this a week or two, and also in putting Congress in the position, instead of the agency, to make a determination relative to the plan, as to whether or not its successful implementation would indeed lead to financial viability.
So on the one hand, I'm encouraged that the leaders are now taking this issue on and that they're committed, in the words of, I believe, the speaker, to make sure that the automobile industry of this country survives and to take the steps needed to do that, acknowledging, of course, that the industry itself has got to take the steps necessary.
But now this is right smack in the Congress's lap, by the decision of the leaders. It's not in our lap today or tomorrow, the way we would have liked it and the way we proposed it, working very hard on a bipartisan basis, but by the decisions of the leaders that they could safely delay a week or two while the plans are submitted and the Congress looks at them.
Finally, I want to just thank everybody who has participated in this. This has been a very, very complicated coming together. But there's not a Democratic plan now. There's not a Republican plan now. There's a bipartisan plan now which the leaders have this afternoon, which we had hoped would have been presented as an amendment to a bill tomorrow or today. There's already been held -- hearings have been held already in the two relevant committees in the House and the Senate.
So we're disappointed that those hopes that not been met. But I am encouraged, at least, that the leadership have made a commitment to make -- take every step that we need to take to help this industry, which is so critically important to the economy of this country, to help it survive with these bridge loans.
First, let me call on Senator Bond.
SEN. BOND: Thank you very much, Senator Levin, and thanks to all my colleagues here who, along with our staffs, worked long and hard to make sure this was and is a bipartisan compromise, one which we have shared with the White House and incorporated some of their suggestions. But this is a Democratic-Republican legislative plan that we hope Congress will be able to pass.
Right now, hundreds of thousands of Missouri workers and millions of American workers are threatened with the loss of their jobs. There are folks like Steve Heeley (sp), who works at the Ford auto assembly plant in Kansas City. He is worried about being able to support his wife and daughter if Congress fails to act. Here in Washington, there's been a lot of talk about what the government response to this crisis should be, but talk is not help the (sic) 200,000 Missouri workers like Steven who could lose their job and the many others in auto-related jobs from suppliers of parts down to auto dealerships, who would be in very dire straights if the auto industry went under.
Thanks to the good friends here, these workers, I think, have reason for hope, reason for hope that in the new year they will still have a job that they can go to. This bipartisan compromise will protect the millions of American jobs at stake, protect the taxpayers and will require the auto industry to come forward with a plan to show how they will get to viability, financial stability and profitability.
It is as Carl suggested, had been our suggestion that the Commerce Department, with the oversight board, make the decision on where -- whether the plans meet those tests. There are a lot of steps that the auto industry is going to have to take. One would suggest selling corporate jets might be one. It just is a suggestion; I'm not drafting the plan.
But the auto industry shouldn't get a blank check, which is why we have crafted a bill to save jobs, protect the taxpayers and have tough requirements for getting the industry back on its feet. Each auto industry has to prove their long-term financial health as a condition of receiving the funds, the taxpayer protections and taxpayer equity are -- and are protected and turn around profits.
I think this compromise is the right way to go forward to protect the millions of jobs at stake.
And I'd call on my colleague Senator Stabenow from Michigan.
SEN. STABENOW: Thank you.
Well, thank you, and good afternoon. I first want to say thank you to Senator Levin for all of his hard work; for Senator Bond, Senator Voinovich, for all their wonderful work and reaching out to the White House and Republican colleagues; to Senator Brown, to Senator Specter. Thank you all very much. Senator Ben Cardin has been involved. Senator Casey has been involved. We have a number of people that have been involved.
And I share the optimism that if we had the opportunity to vote today, I personally believe that we would be able to reach the 60-vote threshold.
We all know this is an incredibly tough issue. It's been a very tough week. We've all worked very, very hard.
The good news is, I believe, twofold at this point.
One, we have a bipartisan agreement that takes excellent work from Chairman Frank in the House, in terms of an oversight board and accountability criteria. It takes parts of the Senate, parts of what the White House want. It melds together -- while using funds that were allocated at Section 136, it does not change the retooling provisions, which are very important and need to be replenished. And we will support doing that. So it brings together all sides.
The second positive thing, I believe, is that instead of shutting the door at the end of this week, our leadership, on a bipartisan basis -- the speaker, the majority leader, the Banking leaders, Finance leaders -- have come together today to indicate they believe this industry is critically important to the future of the country. They've indicated that they are asking for a plan that I believe can and should and will be presented to them.
They have indicated we will come back in December. They are not shutting the door. That is reason for hope for millions and millions of people and, I believe, comes as a result of the important work that has been done here to bring people together.
Finally, I would just say one out of 10 Americans works directly or indirectly for the auto industry. We're talking about the fundamentals of our economy. When we were talking before about the financial markets and what would happen to the global markets if there was -- with the problems that were going on -- well, we know that when people aren't working, we also see a ripple effect, not only across America but around the world.
The Canadians now are looking to help their auto industry. The Europeans have been -- they have had a request from the European automakers, including Toyota and all of those in the European markets, for $56 billion.
We're in a global crisis, a global crisis of credit and capital. And if we're going to continue to make things in this country and fundamentally have a middle class in this country, we need to support the folks that started the middle class of this country. And that's the American automakers and the auto workers. And I'm proud to be part of a coalition that's working very hard to make sure we do that.
Senator Voinovich?
SEN. LEVIN: Senator Voinovich?
SEN. VOINOVICH: Thank you.
Right now I think there are thousands, if not millions, of Americans who are tied to the automotive industry who are worried about their jobs and providing for their families, and they're looking to Congress for leadership.
And as co-chairman of the Senate Auto Caucus, I'm pleased that we've come up with a bipartisan compromise to protect a cornerstone of the American economy. I'd like to particularly thank Senator Levin for the work that he has done in helping to draft this legislation and for his outreach to the House to try and make sure that it's as reflective of the House point of view as it possibly can be.
Senator Bond has also reached out -- the two of us -- to the White House to try and make sure that they were on board with this. And as Carl has pointed out, that basically what we're asking for is a viability plan that will guarantee the viability of the companies and guarantee that, to the best of our abilities, the loans are going to be repaid and that we're not wasting taxpayer money.
Our bill gives Congress and the administration strong oversight of what happens after these loans are made. And I think that all of us -- and I think Senator Stabenow did a wonderful job of explaining it -- we need to keep the auto industry whole in this country.
And to put this in the simplest form, there's no guarantee that if this legislation passes, that someone's going to get a loan. What it does do is, it sets up a vehicle where the companies can come, submit a plan, discuss it, and if they are found to be eligible, they are going to get a loan.
And there's something out there in the street that says, basically, if you pass this bill, voila, the loans are going to occur. What we're doing is providing an opportunity for them to come in and get a loan from the federal government.
And I think that, you know, some people say to me bankruptcy, you know, is what we should be doing. Well, according to Mr. Paulson and a bunch of other people, this economy of ours is very fragile. And maybe bankruptcy might be something that you'd look at four years ago, but today it would be disastrous for this country.
And so I say today that, you know, if we don't get this done and they do go under, I believe that we're going to have a deep recession and, quite frankly, from what I can pick up, we may just go over the cliff. And the American people have got to understand that's where we're at today.
So this is very, very serious business. I'm disappointed that the leaders came here today and said we're going to put this off until -- what is it, December the 8th?
SEN. : Eighth.
SEN. : Seventh or eighth.
SEN. VOINOVICH: I'm pleased, as Senator Stabenow says, that at least they acknowledge that we need to do something with this. And I believe that the legislation that we have put together on a bipartisan basis, working with my colleagues -- and it's interesting; Senator Brown's a Democrat. We've got -- well, we've got two Democrats from Michigan -- (chuckles) --
SEN. STABENOW: (He's not asking what ?) -- (inaudible).
SEN. VOINOVICH: Yeah. But the fact of the matter is that we've worked together.
I think this will be the template of any kind of agreement.
And I'll just comment on this attitude of the companies submitting a plan by the 8th. I'd like to know what are the requirements going to be in the plan. This legislation lays out they submit a plan. It's very specific as to what should be in the plan, so that they have something that they can look to and that, when they're submitting, we can look at something and say they have fulfilled the requirements of the plan, or they haven't fulfilled.
But I don't understand what kind of a plan they're going to submit unless they have the criteria for what the plan should be. This legislation provides that criteria. And I'm hoping that we certainly act on this in December. I'm disappointed that we're not going to do it.
This would have been a wonderful Thanksgiving present, for millions of Americans who -- this job is more than a job to them. It's the way they support their family.
There are a lot of worried people out there, folks, today. They're really worried. And this passing of this legislation and the opportunity for a loan, I think, would give them a great deal of comfort, to know that at least we're reaching out to them. We understand their plight.
(Cross talk.)
SEN. BROWN: Thank you. Particularly I thank my colleagues, in the last 72 hours, they and all of us and our staff and the terrific work they did, back and forth, to reach this compromise.
We had hoped that Secretary Paulson would provide $25 billion, in bridge loan, to the auto industry. I sit on the Banking Committee and last week heard three banks each of which testify, each of which had received $25 billion in TARP funds. And AIG, as we know, had received more than $100 billion in TARP funds.
We were hopeful that could have happened. That wasn't to be. Then this week, we had hoped that the Senate and the House could have provided these $25 billion in bridge loans. That was not to be that way.
This is a good compromise. I applaud my colleagues and, as I said, the staff that worked way into the night, staffs for the offices of the six of us and Senator Specter's and Senator Casey's office and Senator Cardin's office and the work they did.
I remain very optimistic. I sat in the Banking Committee -- I'm the only Banking Committee member here, in addition to Senator Casey, who has been part of this -- and listened to the three auto executives and listened to the president of the United Auto Workers.
And what I heard gives me a lot of hope, for this industry, once they have this bridge loan in place and can move forward. Ford, in the first quarter of this year, had a profit. Other companies were starting to turn things around. Then we had high gas prices. Then we had the credit crunch. Then we had the recession. And it's clear these industries need a little bit of help.
And I'm also optimistic because I look at the union-management contract of a year ago and the kinds of cost-cutting, cost-savings that labor and management are engaging in. And I'm optimistic because of something my colleague from Ohio said -- Senator Voinovich -- that this isn't just a job.
When you talk to people that work in auto plants, they talk about building cars. And they talk about the pride of working with their hands and the pride of working with computers and the pride of their technology in the cars they produce.
And this means way more than -- it means a paycheck, first and foremost, and providing for their families, but it means way more to that to people in Lordstown and people in Toledo and people in Avon Lake and all over my state and all over Missouri and Pennsylvania and Michigan and throughout this great country.
Specter.
SEN. SPECTER: I compliment my colleagues for their leadership and am pleased to join them on this important legislative proposal. I believe that it is very important in the next period of time that the auto manufacturers establish their case. And they will have an opportunity to do that.
And I believe that not only must the auto manufacturers persuade the Congress, they're going to have to persuade the American people. There is a lot of skepticism in Pennsylvania and, I think, across the nation about the $700 billion which has already been appropriated because of the lack of results.
There is no doubt that the auto manufacturers are key in our economy and that the consequences of their failure could be disastrous. And what they now have an opportunity to do is to present the facts, the hard facts. And those facts require an analysis of where they are and what their problems have been and what they are going to do to solve them and what they are going to do with the money so that there is a reasonable likelihood that it will -- that it will be successful. I think that has to be established, because it is the persuasion of the Congress which comes back to the persuasion of the American people and there's a lot of skepticism out there.
The other point which I believe has to be emphasized is that this is not new money. It is not new money. It has already been appropriated to meet the mileage standards. So it is a bridge loan. It is a temporary matter on reallocation. And I believe that the mileage standards are important and the environmentalists have a very key point, but there's no doubt that next year, with the Democrats in control of both houses of Congress and the White House, they can write their own ticket if they disagree with what Secretary Paulson has said. He's not around anymore.
But I think that it is appropriate not to wait, not to take that risk based on what could happen in the intervening time. So I believe we are on the right track, but I think a great deal more has to be done and will turn on the quality of the facts presented by the auto manufacturers, and then in due course we can move ahead.
Thank you.
Q Senator?
SEN. LEVIN: Yes?
Q What would you advise the automakers to do at this point?
SEN. LEVIN: To present the plan which they would have had to have presented in order to apply for the loan in any event, and to just keep on fighting for the workers. It's not just the manufacturers here. It's the UAW which is fighting for workers; it's the component manufactures, the parts manufacturers in half of our states. It's the auto dealers in all of our states, all of our communities. They're all fighting here for the restoration of health to this industry.
Through no fault of its own, this international global economy has gone into a ditch. That's not caused by the auto industry. So while they may have been a cause of some of their problems, they are not the case of their current problem, and they can't solve that economic problem globally.
So what the auto industry's going to need to do, because of the decision of the leaders here, is, instead of presenting that plan after enactment -- if we could have gotten this passed -- to the secretary of Commerce with their application, they're going to need to present that two weeks from now, approximately, to the Congress and to the committees. It's a delay which I think is risky and unnecessary, because I myself would prefer that the agency that's going to administer the loans, that has the capability technically to look at these plans and make sure that they can lead to economic viability, I think that is the appropriate place to review the plans. That is what is in our bill.
Yes?
SEN. VOINOVICH: I'd like to comment on this. The question is, what's the criteria? Okay? Is Speaker Pelosi and Leader Reid -- Majority Leader Reid going to lay out some piece of paper that says this is what a plan is supposed to look like? This legislation's very specific about what's being required. How do you ask somebody to present a plan of viability when you haven't laid out for them what that plan should be? There are very specific things in this legislation that they could look to and say here's what we're asking for.
And of course, if they meet it, they get it. And if they don't meet it, they don't get it. But right now this is up in the air.
(Cross talk.)
Q The speaker and the leader were very critical of the CEOs' performance during the testimony. How much of the blame can be placed on their testimony? And one issue that got a lot of attention was corporate planes.
Do the CEOs of the companies need to take any action speaking to -- you know, basically accept more pain or more sacrifice to get this through?
SEN. LEVIN: Well, I think that they acknowledged yesterday that previous decisions made, by the industry, were a part of the problem that they had been in and that they frankly were beginning to address.
Now, people who talk about, well, what about quality of the cars? That's a 1970s argument. The American automobiles are just as high- quality now as any automobiles, in the world, according to all of the standards. They're in fact ahead of the Europeans and match the Japanese.
The quality issue is still raised however. And then there's also the issue, the other issues that are raised, about benefits for the employees. The employees have taken huge hits, as anybody who has auto manufacturing employees, in their state, know.
They've already taken huge hits. But there would obviously need to be additional sacrifices. And if the planes are a part of that sacrifice, it's fine with me. But there are bigger issues here that are at stake.
Yes.
Q Your disappointment with your legislation not being part of this, involved in this whole situation now, but also --
SEN. LEVIN: It is part of the situation now.
Q Do you think that it can be acted on then?
(Cross talk.)
SEN. LEVIN: Sure. It's not going to be acted on today or tomorrow. That's my disappointment. But it's now there.
It's a bipartisan proposal which has taken into consideration a lot of the House language. A lot of Barney Frank's language is in here: protecting Section 136, the criteria, the standards, the environmental standards of Section 136, the replenishment of the Section 136 fund, number one, by any repayments of loans, by any sales of stock. But also any of the money that is not used stays in that fund.
So we are protecting Section 136. The House was very determined to do that. So this for me and, I think, for all of us is the place where now the view -- people will look to this now as, well, is this something which can get a majority in the House and perhaps, if necessary, 60 in the Senate?
Frankly, we had a good shot today, I believe, of getting 60 votes in the Senate, but the leader thought otherwise. He's the leader; we're not.
Yes?
Q Senator --
Q Senator Levin, do you have a commitment from your leader that once these plans are submitted and additional hearings are held, that your bill will be brought up as an option?
SEN. LEVIN: No, we can -- he doesn't have to give us that commitment. We will bring our bill up when we come back in on the 8th.
SEN. STABENOW: Right. And if I --
SEN. LEVIN: I mean, that's something which we have a right to do as senators --
SEN. STABENOW: Right.
SEN. LEVIN: -- and we intend to do. The commitment is to come back. That's the commitment --
SEN. STABENOW: Yes.
SEN. LEVIN: -- the key commitment.
Q (Off mike) --
SEN. STABENOW: Carl, if I could just add, I think the stress -- the important thing to stress here is that we have the only bipartisan plan that is bringing together the White House, Republicans, and Democrats. And so I'm hopeful -- I think we're all hopeful -- that as they proceed and look at this, they will come to agree with us that this is the foundation, this is the bill. I mean, this is the group that has come together to find the compromise that people, frankly, have been asking for.
Q Well, let me just follow up --
SEN. LEVIN: Follow-up. Yes, get his follow-up.
Q You don't have assurance, then, that we won't be back to the same argument of whether it's TARP or not TARP as of December 8th?
SEN. LEVIN: People have a right to offer whatever amendments they want on legislation in the Senate. Okay? People have a right to offer amendments, unless there's technical cloture and germaneness and all that.
But we have a right to offer this amendment. And I believe -- and I didn't hear the majority leader on this, but I believe that he is generally supportive of our effort. Now, you heard him, and I don't know whether he said that or not, but I'm sure if you ask him -- he told me, at least, that he is generally supportive of this effort.
He knows this is a constructive, positive effort. And there is no other bipartisan effort that has been made here. This is it, folks. And this has had huge input from the White House, as has already been said, that we have taken into account, and used the language of the House of Representatives, their Section 136 language, the way the board is created.
The one difference that seems to be here is whether or not there should be delay to look at the specifics of the plan, or whether or not, as our bill does, we have the agency in charge, the Commerce Department, look at the specifics of the plan.
But we require a plan, and they want the plan to be reviewed here in the Congress that week of September -- of December 7th. Folks, that's a delay which I don't think is going to be useful. I think we're going to come right back to what we have worked so hard on, which is this bipartisan plan.
Q (Off mike) --
SEN. BOND: Todd (ph), wait a second.
Carl, let me speak to a couple of issues that have come up here.
First, on using it out of 136 or out of the TARP, I think Secretary Paulson is very clear that major financial systemic risks remain, and he is trying to save I think it's $410 billion that's not been expended in case the situation goes worse, so the Obama administration will have those funds available. Now, that's why we suggested using the 136 funds, which have already been appropriated and which do not come out of the 700 billion (dollars).
I am -- I have pushed strongly for using the 136 funds and replenishing them, because I believe the future -- and this is just my view -- the future of the automobile industry, with the shortage -- short supply of gas, which is going to get prices high when the economy recovers, is going to force more people to look for hybrids and battery-operated automobiles. And I would say provincially that Missouri, as the battery capital of America, is going to be one of the places that produces those batteries, but it will be for the good of the auto industry. It will be good for consumers. And we need to retool the cars to use more electric motor power in our automobiles than gasoline power.
SEN. LEVIN: By the way, those of us that are Democrats up here all very strongly supported the use of the TARP funds.
SEN. VOINOVICH: I would like to say I supported --
SEN. LEVIN: Excuse me -- I didn't mean to exclude anybody. (Laughter.) I'm sorry. I know that those of us -- and Senator Voinovich and there may be a few other Republicans.
SEN. : Let me just say --
SEN. LEVIN: I didn't mean to exclude you.
I just want to let you know -- let me say -- there wasn't the votes to get it done.
SEN. : Pass.
SEN. : Yes. Yes.
SEN. LEVIN: And that's what the majority leader said. The White House is strongly opposed to it. Paulson is strongly opposed to it. The majority leader reached the conclusion we did not have the votes. I didn't mean to exclude Republicans, but there are perhaps a handful of Republicans that would -- and I'm not being critical. I'm not being critical, here. I'm just saying the votes were not there.
You had a question.
Q Yes. Assuming the bill is passed and assuming that the plans are approved that the automakers submit, how quickly would they be receiving loans?
SEN. LEVIN: Under our bill, it would be a matter of a few weeks after the enactment of this bill.
SEN. STABENOW: Twenty-five days. Twenty-five days, at the earliest.
SEN. LEVIN: Well, there's three different -- there's a seven-day period --
SEN. STABENOW: Yeah.
SEN. LEVIN: I'm going to say a few weeks.
Q The whole premise of this is based on you're going to replenish 136 when the loans are repaid, right?
SEN. LEVIN: No. No. The premise of this is that the only available source is Section 136 loans and that we --
Q (Off mike) -- the people who 136 is they'll get their money back when the loans are paid?
SEN. LEVIN: No.
What we are promising the people who -- all of us supported Section 136 -- is that, number one, the money not used for loans will be used pursuant to 136 -- we're leaving 136 intact. We're leaving all the provisions, including the environmental protection provisions, including the emissions, the Tier 2 standards, they're all in place; plus that when the stock, if it's sold by the government, that the companies provide as part of this deal, is sold, that money goes into Section 136 as well.
So that's what the promise is of this bill.
Yes? Yes? (Cross talk.)
Q (Off mike) --
SEN. LEVIN: Yes.
Q Two of the three companies have described their financial position as extremely precarious. Do congressional leaders bear some responsibility lest -- if any of these companies go under between now and the end of the year?
SEN. LEVIN: I think they have taken on a responsibility by delaying this by a few weeks. I'm not going to say -- I can't allocate responsibility for some future action which hasn't taken place; that would have to be judged if it occurs.
I'm just simply saying they have taken responsibility, but also, they've done some positive things. They've taken a position -- is, they're not going to let this industry go under. It shouldn't go under. They said bankruptcy is not an option. That is a very important statement you heard today from the speaker.
You get all of these articles that are in the press, says let 'em go bankrupt, let 'em go bankrupt. The speaker of the United States of America today said -- and I am sure that Harry Reid said it, or believes in it too -- bankruptcy is not an option, because it would mean dissolution and not Chapter 11 but Chapter 7.
SEN. STABENOW: The other point that's really important, though, is that Secretary Paulson, the Federal Reserve, right now, without us, could act. And in fact, we wouldn't have had to be here this week doing this if they had chosen to do that. So if there is an emergency before December 8th, that Secretary Paulson and the Federal Reserve do have the ability to act on their own.
SEN. LEVIN: It's a very important point here.
SEN. BOND: There's -- well, that's a -- there's a question about that. There's a question about that.
SEN. LEVIN: Well -- no, he is -- no. Paulson has told me -- (cross talk) -- well, look, Paulson has told me personally that he believes that the authority exists under that act --
SEN. STABENOW: Right.
SEN. BOND: Okay.
SEN. STABENOW: Right. Yeah.
SEN. BROWN: Paulson told me personally --
SEN. LEVIN: -- to do that. He's decided, though, that's not what the best use is of the funds.
SEN. STABENOW: Right.
SEN. LEVIN: Let me tell you something. We want to talk about responsibility -- there's risks in this delay, but the greatest responsibility, in my judgment, if any one of these companies go under in the next few weeks or because of this delay, won't be because of the delay. It'll be because of a decision by Secretary Paulson not to use available funds.
SEN. STABENOW: Right.
SEN. LEVIN: Seven hundred billion dollars, in a stabilization fund.
One -- 4 percent of that is about $25 billion. One -- and that's what who we're talking about, is the auto industry. One insurance company, one, that has made huge mistakes, AIG, has gotten $150 billion from this administration; and yet they're not willing to use that fund -- which has supplied a significant amount, by the way, to support that AIG loan -- they are not willing to provide this $25 billion. That's where the major responsibility would lie, in my belief. However, this delay does create risks.
STAFF: Thank you, everybody. We have a vote.
END.
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