Congressman Jack Kingston today voted against a $14 billion loan program created to bailout the "Big Three" automakers. While he noted significant progress from the original $34 billion proposal, Congressman Kingston expressed concerns with the potential to nationalize an industry, failure to address the out of sync wages of autoworkers and Washington's bailout spending spree.
"While American families are tightening their belts, Washington's running to the printing press and borrowing from China," Congressman Kingston said. "So far this year, Washington's poured more than $3.2 trillion into bailing out the economy, the national debt has risen to $11.3 trillion and all we've got to show for it are spotty results. This is all deficit spending and it's got to stop."
The legislation, which was published just hours before the final vote, would provide $14 billion in loans to the automakers in order to prop them up through March 31. It would create a "Car Czar," appointed by the President, which would oversee the program and largely dictate the companies' spending and car production.
"The 'Car Czar' is code for nationalizing industry," said Congressman Kingston. "Having seen the government's handling of Hurricane Katrina, immigration reform, and the Wall Street bailout, it's hard to see how Washington is going to turn the Big Three' around."
Conditions placed on the loans include repayment within seven years, limits on executive compensation and a prohibition on paying dividends during the term of the loan. In addition, the "Car Czar" would have the authority to block any asset sale, investment, contract or transaction in excess of $100 million. The companies would also be prohibited from purchasing, and required to sell, any private airplanes after a much-publicized gaff involving the "Big-Three" CEOs flying to Washington to ask for the bailout.
"One of the core problems here is over-market wage rates and this agreement does nothing to address that," Congressman Kingston said. "The CEOs made millions but now expect taxpayers to come to their rescue while they're paying unskilled UAW workers $70 an hour. Meanwhile, Toyota's paying its workers $48 and non-UAW workers are getting $25. In my view, Chapter 11 is the only thing that will allow them to bring those wages back in line with reality."
While First District residents have overwhelming expressed their opposition to the bailout, Congressman Kingston notes that the outcry pails in comparison to that his office experienced during the debate over the Wall Street bailout - something he attributes to "bailout fatigue."
In an effort to better educate his constituents about the issue, Congressman Kingston created a website located at http://kingston.house.gov/bailout. Meant to serve as a clearinghouse of timely information, the website contains bill text, summaries and analysis as well as opinion pieces, press coverage and multimedia.
Despite Congressman Kingston's vote against the bill, the House passed the legislation by a vote of 237-170. The Senate is expected to vote on the legislation on Friday. If it overcomes Republican opposition in that body, it will be sent to the President for signature.