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MS. BRZEZINSKI: Here with us now, Republican senator from Alabama and ranking member of the Senate Banking Committee, Senator Richard Shelby, and Senator Debbie Stabenow is a Democrat representing Michigan.
Senator Stabenow, I'll start with you. I know you were against some of the initial bailouts, but you're for a bailout of the Big Three.
SEN. STABENOW: Right.
MS. BRZEZINSKI: How do you square that, and how do you think the case is being made on Capitol Hill so far?
SEN. STABENOW: Well, first of all, I was concerned that $700 billion was a lot of money, and it wasn't focused on the underlying concerns of jobs and fixing the housing market.
Which, in fact, we found that the money's been given to banks. They haven't lent it; they hold onto it or buy other banks. And which has added to the problem -- suppliers can't get loans to be able to make parts to be able to give to the automakers.
So what I'm talking about is a focused loan. This is not a bailout. This is a bridge loan to be able to allow the companies in a global credit crisis, where every other country in the world is helping their auto industry.
We need to make sure we can manufacture in this country, keep good-paying jobs.
MR. SCARBOROUGH: Yeah.
Hey, Senator Shelby.
SEN. SHELBY: Good morning.
MS. BRZEZINSKI: Morning.
MR. SCARBOROUGH: Senator Stabenow says that this is a loan. Why can't you just extend the Big Three a loan so her state doesn't sink into a depression?
SEN. SHELBY: Well, let's be honest about it. There's no banks or group of banks in the world would make this loan, because they don't believe it's a good loan that will be paid back.
Two weeks ago the Big Three came to the Banking Committee. They wanted 25 billion (dollars). Two weeks later they come, they want 34 billion (dollars). I fear that this is just an installment. This is this big installment for the taxpayers. This money'll never be paid back.
These companies could be saved, if they have the will to do it, and they have to be restructured. And these companies -- the plan now we had yesterday is not much more than we saw two weeks ago. It's to get --
MR. SCARBOROUGH: Well, Senator --
SEN. SHELBY: It's to get the money, is what it's about.
MR. SCARBOROUGH: Senator Shelby, though, we've heard this is a North-South battle, that a lot of states like Alabama have foreign carmakers coming in. A lot of your residents in the great state of Alabama -- roll, Tide -- are employed by foreign automakers.
So actually, if the Big Three go under, that may help Alabama. So are you doing this in your own self-interest?
SEN. SHELBY: Oh, no, no. Not at all. We don't want the Big Three to go under. We want them to survive, but to survive they've got to become efficient.
They've got to be better managed. They're bloated with management, too many people, too many people in the labor force. They've got to be lean, but they can be saved, and they've got to put products out that people will buy.
The companies are worthy of being saved; we know that. But they're not going to be saved by just an infusion of money. It's going to delay the inevitable.
SEN. STABENOW: Joe, can I respond to that as well?
MR. SCARBOROUGH: Sure.
SEN. STABENOW: Because the reality is that Senator Shelby's constituents, his automakers, have now come out in favor of this loan, because they have the same suppliers.
If we see GM go bankrupt by the end of the month, then we begin to see every major supplier in this country go bankrupt or have serious problems. They supply Toyota; they supply Nissan, Honda. Everybody is affected. They supply defense; they supply aerospace.
So this is a much broader economic issue. And it's very unfortunate if people are looking at it in terms of state advantages, because this really is about our overall economy.
Do we want to go from a recession to a depression? It's mind- boggling to me, if that's what we're talking about.
MR. BARNICLE: Senator Shelby, I have a question off of what Senator Stabenow just raised -- the issue of national security.
I think I would probably faint, as would most Americans, if we ever got a sense of how many billions of dollars are wasted in the Defense budget on appropriations for munitions that don't work, planes that don't fly, things that literally never get off the ground.
Why is not the survival of the Big Three, the automobile manufacturing in this country, a matter of national security?
SEN. SHELBY: Well, I don't believe it's national security. I do believe it's important that the companies survive, and they can survive if they have the will to do it. But the plan they've submitted up here is not survival; it's a transfusion to keep them going a few more months.
And then we had testimony yesterday from a noted economist, said this would cost at least $125 billion; some people say more. That's why I'm against this, because the money's not going to be paid back.
But these companies can survive. They've got to slim down. They have bloated management. They have bloated labor force. They're not competitive, and they're not going to be competitive with us putting money into them.
SEN. STABENOW: You know what, they can slim down, and they certainly need to make major changes. But the reality is that this is national security.
If the Army drives it, we design it, we make it, we fix it. Of course it's national security.
MS. BRZEZINSKI: But Senator Stabenow, clearly, these companies have not acted with vision. They haven't made cars that have brought them into the future. They take some responsibility for this, and I think there are people wondering how many more times are we going to bail out the Big Three, at this point?
SEN. STABENOW: Sure, and I understand that. Have they made mistakes? Absolutely. Have they misjudged the marketplace? Absolutely.
What's ironic --
MS. BRZEZINSKI: Well, isn't -- (inaudible) -- capitalism? They know what --
SEN. STABENOW: What's ironic, though, is that now, just as they're getting it; just as the Chevy Volt's ready to come out, the electric vehicle, in another year -- just as they have turned the corner, right when they are getting it, making quality cars, turning the corner, then a global credit crisis hits and we find ourselves where we are.
MS. BRZEZINSKI: Yeah, the Chevy Volt, though, if I can -- if this is turning a corner, I'm very skeptical and I have more questions. Because that's a $40,000 vehicle that won't be ready till 2010. That's unacceptable.
SEN. STABENOW: Well, 2010, though, is next year, in terms of the models. And I understand what you're saying, but every single vehicle that goes on the market, a new, alternative-energy vehicle, will cost more in the beginning. That's why we passed a consumer tax credit of up to $7,500 to help consumers get in the marketplace. The federal government, as a consumer, can help bring down the price.
I'm just saying this: We can't, as a country, walk away from manufacturing. We can't walk away from middle-class jobs. We can't walk away from making things in this country.
You know, it's not all about moving paper around and credit default swaps on Wall Street. This is about Main Street. Fundamentally, it's about preserving the middle class.
MS. BRZEZINSKI: Okay. Senator Shelby, go ahead.
SEN. SHELBY: I just want to add we can't do a lot of things, but we'd better always walk away from failure. These companies have failed already. That's why they're here looking for a bailout; let's make no mistake about it.
And if I had any belief that this money would be paid back, that this given money would revive a model that has failed and management has failed, I would be for this. But you can't waste this money. This is taxpayers' money.
MS. BRZEZINSKI: Well, Senator Shelby, that's a fair argument, but look at the front page of the Detroit Free-Press. They are begging for help, at this point. And the headline itself says, you know, nothing more that can be said: "Invest in America."
MR. BARNICLE: Well, Senator Shelby, I don't want to get into the whole thing about failure and what the United States Senate and the House of Representatives have done for years. (Chuckles.)
But let me ask you, I understand you're going to vote against this. I understand that you don't think that it's a valid expenditure of federal funds.
What do you hear from your constituents? Are they overwhelmingly against this? And if so, do they not know much about the history of this country, that this is one of the great key industries of America?
SEN. SHELBY: Well, absolutely. The people that I represent, the people of Alabama, they know very much. We've bought cars -- General Motors, Ford, Chrysler -- for years. I have.
But this -- these companies are not the companies of the '50s and the '60s. These companies have already failed. I've said -- one time I said they're kind of dinosaurs, and they're going to be gone, one way or the other.
The question, I think, that needs to be answered, are they willing to restructure where they can be competitive? Thus far, I'd say the answer is no.
MR. SCARBOROUGH: All right. Senator Shelby --
SEN. STABENOW: They have said yes. They have said yes, and I would invite Senator Shelby to come to Michigan. This is not your father's factory. It's high-tech manufacturing, trained workers, quality vehicles.
We're debating about 20 years ago, not about what's happening today.
MR. SCARBOROUGH: All right. Thank you so much, Senator Stabenow.
SEN. SHELBY: Joe, I hope to see you tomorrow.
MR. SCARBOROUGH: I was just going to say, Senator Stabenow, thank you so much; good luck.