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Senate Banking Hearing Second Guesses Auto Task Force. Wants to Know What the Exit Strategy Is?

Obama Administration is under attack for its deficit spending, dealer closings, and the creation of "Government Motors."

by on Jun.11, 2009

Senator Dodd

"How do we get paid back?"

In a hearing yesterday with the usual, large, degree of political posturing, the Senate Banking, Housing and Urban Affairs Committee took senior members of the Obama Administration to task for its handling of the collapse of Chrysler LLC and General Motors Corporation.

Senators from both sides of the aisle wanted to let voters know that they weren’t happy with the bailouts of Chrysler and GM, which — not coincidentally — are deeply unpopular with a clear majority of voters.

“The Auto Task Force must begin planning now for how to remove the government from the auto business,” said Senator Michael F. Bennet, a Democrat from Colorado.

This sentiment was repeated by the committee’s chairman, Connecticut Senator Christopher Dodd, also a Democrat, who is facing a strong re-election challenge because he allowed taxpayer funds to go for millions of dollars in bonuses to the financial speculators at failed AIG, which was part of the even more despised, if that’s possible, taxpayer bailouts for Wall Street plutocrats.

Senator Shelby

Shelby, to be fair, has consistently opposed taxpayer loans for domestic companies, unlike his colleagues.

Joining the “not at all happy about this parade” was Republican Richard Shelby, Alabama’s senior United States Senator, and Ranking Committee member, who has consistently opposed auto aid for domestic companies.

From the start Senator Bennet set the themes that echoed in the Dirksen hearing room all afternoon.

“I think an exit strategy from the auto industry ought to encompass three basic goals,” Bennet said: “One, seek to reform and repair the auto industry so it can compete in the long run; Two, get out as soon as is practicable; and, Three,  retrieve as much of the taxpayer investment as is practicable.”

Reluctant shareholders

Ron Bloom,left, and Ed Montgomery

"The government has no desire to own equity stakes in companies any longer than necessary."

The Obama Administration, no stranger itself to the art of posturing, clearly understood what it was facing in the hearing and its representatives came fully prepared to argue its case.

“The government has no desire to own equity stakes in companies any longer than necessary,” said Ron Bloom, senior advisor to the Auto Task Force, a cabinet level organization that is co-chaired by Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers. (more…)