S10894 CONGRESSIONAL RECORD — SENATE December 11, 2008 

I know these companies would say 

they are somehow unique and that 

bankruptcy simply will not work for 

them. I am not so sure about that. The 

Big 3 worry that today’s financial environment would prevent them from securing debtor-in-possession financing 

from the private sector. They would 

need such funding to keep operating 

through a bankruptcy proceeding. This 

is where the government can step in. 

This would ensure that automakers 

have the funds to complete the Chapter 

11 process. 

The Big 3 also worry that few consumers would buy a car from a company that might not be around in a few 

years to stand by the car’s warranty. 

Again, the government could step in 

and guarantee the warranties. After 

all, what is a better backup of a warranty than the full faith and credit of 

the U.S. Government? And if the government took these steps, wouldn’t 

that give the Big 3 a good chance to 

successfully reorganize through Chapter 11 bankruptcy? 

The Big 3 have testified before Congress that they would require about $34 

billion to avoid liquidation. They 

would need this help over the next year 

or two. Many independent analysts, 

however, believe that number may triple that. Frankly, I am more inclined 

to believe the independent estimates 

are closer to reality. After all, the Big 

3 have time and again proven unable to 

adequately plan for the future. Why 

should we believe their projections 

now? With the deficit reaching $1 trillion or more next year, why aren’t we 

having a debate over the true cost of 

such a bailout? We should be worried 

about the U.S. taxpayer. 

In this legislation, there has been 

talk about creating a ‘‘car czar’’ to 

oversee any restructuring that would 

accompany a bailout. This czar, however, would not have nearly the same 

sort of powers a bankruptcy court 

judge would have under Chapter 11. Injecting a government bureaucrat into 

the process is not a serious solution. If 

you have been around Washington long 

enough, you know it is more like a serious problem. Wouldn’t it be better to 

have an expert such as a bankruptcy 

court judge oversee the process? 

Not only would a bankruptcy judge 

have more tools than a car czar, but 

the judge would not be influenced by 

the political process. A bailout would 

invite all sorts of meddling from lawmakers to have the companies carry 

out their own pet policies. We should 

not be using this bailout as a vehicle to 

implement domestic social policy. 

Not to mention that creditors or 

stakeholders will just lobby Congress 

to make the sort of concessions that 

would be required of them under the 

bankruptcy. We see this sort of lobbying right now with the TARP program. Everyone is trying to tweak the 

program to benefit their own narrow 

self-interest. Why would we expect the 

auto unions or suppliers or dealers to 

behave any differently? I worry that 

politicizing the restructuring of the 

Big 3 would jeopardize any chances of 

success they may have. 

All this talk of government-directed 

restructuring also raises bigger picture 

questions. Why does Congress think we 

can succeed where so many businessmen have already failed? What sort of 

experience in the car-making business 

does this Congress have? Last I 

checked, none of my colleagues have a 

background in running a car company. 

And this car czar seems doomed to failure too. One government bureaucrat to 

oversee the reorganization of three 

massive companies? What track record 

can we point to that makes us think 

this will work? 

This strikes me as a questionable 

intervention by the government into 

the private sector. We have the government thinking it can run these businesses better than they can. Heck, we 

cannot even run the government. We 

also have the government choosing 

which individual companies deserve 

help and which do not. This is not what 

the Government should be doing. Government should not be picking winners 

or losers in the private sector. For the 

long-term health of the country’s entrepreneurial-based economy, this 

could be a dangerous precedent. 

One of the companies asking for a 

bailout is Chrysler, which is owned by 

an investment fund known as Cerberus. 

Some reports indicate Cerberus may 

have significant asset holdings, into 

the billions of dollars. But it appears 

Cerberus has done nothing to infuse 

any emergency cash into Chrysler to 

save it. Why should the government 

bail out Chrysler, when its own parent 

company seems unwilling to offer any 

help? 

If we bail out the car companies, 

what does that mean for other struggling industries? The automakers are 

not the only ones suffering today in 

this bad economy. Would we have to 

bail out every large company in every 

major industry? Tourism is one of 

America’s biggest industries and has a 

high employment multiplier, much 

like the auto industry. Hotel rooms are 

going empty as consumers cut back on 

travel. Many state economies, such as 

in my own State of Nevada, are hurting 

because of the downturn in consumer 

travel. Should the hotels receive a bailout? How about the newspaper industry? We know their businesses are 

hurting too. The Tribune Company 

filed for Chapter 11. Should we be bailing them out as well? Where do we 

draw the line? Can we even draw a line 

once we have given the Big 3 a bailout? 

The proposed automaker bailout is 

indicative of a big-government approach to dealing with our economy. 

We are in the midst of a recession, yet 

we have come back for a late session of 

Congress to talk about saving just 

three companies. Why aren’t we considering pro-growth policies to help the 

larger economy? We should be considering long-term, pro-growth tax cuts 

rather than searching for ways to 

spend more of the taxpayers’ money. 

For instance, lowering the corporate 

tax rate would put more money back 

into the hands of companies all across 

America. This would help companies 

stay afloat and to avoid cutting jobs 

during these difficult times. Instead, 

the Democrats are looking to spend 

money on bloated, uncompetitive automakers. 

As we debate whether to loan billions 

of dollars to the automakers, I urge my 

colleagues to consider all the important questions I have raised today. 

This issue is not as simple as answering ‘‘how many jobs might be lost?’’ or 

‘‘how much it will cost the government?’’ We must also consider questions such as ‘‘what is the Government’s proper role during this economic downturn?’’ ‘‘What could be the 

unintended consequences of our actions?’’ ‘‘Are we setting a dangerous 

precedent for needless political intervention?’’ ‘‘How might this affect our 

ballooning deficit?’’ ‘‘Are we taking 

the best course of action for the longterm health of the U.S. Government?’’ 

We would do America a disservice by 

approving any bailout package for the 

Big 3 before finding at least some consensus on these questions. Furthermore, I believe we must look more 

closely at Chapter 11 as a viable option 

for the automakers. Chapter 11 reorganization for any of the Big 3 is far from 

ideal, but we do not live in an ideal 

world nor during ideal times. We 

should not dismiss one of the most 

powerful tools available to us so readily. 

I hope my colleagues will think long 

and hard about the issues I have raised 

today before making any decisions 

about the possible bailout. If this bailout package that is before us today 

fails, we can rewrite the bill and do it 

in a way that is better for the U.S. 

auto manufacturing industry. American taxpayers deserve nothing less. 

Mr. President, I yield the floor and 

suggest the absence of a quorum. 

The PRESIDING OFFICER (Mr. 

BROWN). The clerk will call the roll. 

The legislative clerk proceeded to 

call the roll. 

Mr. CARDIN. Mr. President, I ask 

unanimous consent that the order for 

the quorum call be rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

EXTENSION OF MORNING 

BUSINESS 

Mr. CARDIN. Mr. President, I ask 

unanimous consent that the period for 

morning business be extended until 12 

noon, with Senators permitted to 

speak therein for up to 10 minutes 

each. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. CARDIN. Mr. President, I suggest 

the absence of a quorum. 

The PRESIDING OFFICER. The 

clerk will call the roll. 

The legislative clerk proceeded to 

call the roll. 

December 11, 2008 CONGRESSIONAL RECORD — SENATE S10895 

Mr. VITTER. Mr. President, I ask 

unanimous consent that the order for 

the quorum call be rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

AUTOMOBILE INDUSTRY CRISIS 

Mr. VITTER. Mr. President, I stand 

to again address the key issue before us 

that affects so many Americans, American families, and indeed all of us, 

through our economy: the proposed 

U.S. auto industry bailout. 

Yesterday, I stood here and announced two conclusions I was driven 

to reach. First, I would have to strongly oppose the bailout package in its 

present form because I don’t think it 

demands the fundamental restructuring it will take for those companies 

to survive. Second, because of that 

very point, I would use every procedural tool available to block, stop, and 

delay that package from passing into 

law. 

I, again, reached those conclusions. I 

restate that commitment for one very 

simple, very compelling reason—because so much is at stake; because we 

need to get it right; because millions of 

individual workers and families, and 

indeed all of us, through our economy, 

will suffer the consequences of our not 

taking appropriate action. 

Again, let me be clear, I am not trying to block this package in spite of job 

losses that would occur if these companies went down. I am trying to block 

this package because of that, in light 

of that, because this package doesn’t 

demand the fundamental core restructuring that is absolutely necessary for 

these companies to survive. 

This package puts those companies 

down a road where I believe that is unlikely to ever happen. It would throw a 

lot of taxpayer dollars at the problem 

to buy time, but it doesn’t change the 

endgame, in my opinion. 

Let me also make clear, having said 

all that, I am not for doing nothing. I 

am not for going home and forgetting 

about this and walking away. This is a 

serious crisis we must address. I am for 

doing something, but the right thing, 

the right way, something that will ensure, demand the fundamental core restructuring it will take for these American companies to survive. 

What do I mean by that? I could support a few alternatives. Let me outline 

two specific alternatives that are being 

worked on now, that have been developed, that are being discussed by many 

Members that I could support. First of 

all, I could certainly support a strong, 

comprehensive alternative being developed by Senator BOB CORKER of Tennessee and others. That proposal 

wouldn’t throw $14 billion at the company before any outline of a restructuring plan is agreed to. It would say: 

No, we need to agree and nail down and 

ensure some of those fundamentals 

now, before any taxpayer dollars go to 

those companies. 

What are those fundamentals? Senator CORKER outlines four that I agree 

are at the core of the issue and must be 

nailed down before any taxpayer dollars should go to those companies. 

First, his proposal would require that 

participating companies reduce their 

outstanding debt obligations by at 

least two-thirds by forcing the companies’ bondholders to accept an equity 

swap or debt for debt and equity swap— 

in other words, for the taxpayer dollars 

we would be sending to those companies not to boost the take, not to boost 

the value of bonds for those bondholders, but for the bondholders to contribute something up front to reduce 

the debt of the companies. That is crucial because right now those companies, particularly GM, are drowning 

under unbelievable debt, and that alleged loan would be on top of that. So 

that is crucial. 

Second, we would agree up front that 

the companies would become more 

competitive by requiring that all-in 

labor costs and work rules would be 

immediately on par with other 

automaking companies such as Nissan, 

Toyota, and Honda. Obviously, a major 

source of the uncompetitiveness of the 

three U.S. automakers is their labor 

costs. They cannot possibly compete in 

this global marketplace when their 

costs are way, way higher, 80 percent 

higher than competitors such as Toyota, Honda, and Nissan. This aspect of 

the Corker plan would ensure that is 

nailed down up front. 

Third, the legislation would require 

that changes in payments to the UAW 

VEBA accounts occur to help the companies’ cash flow, specifically that at 

least half of any scheduled payments 

be made in stock. There again, it would 

reinforce the sense that the workers 

and the union have a real stake in all 

of this working and in those companies 

surviving. 

Fourth, any compensation, outside of 

customary severance pay, that goes 

now to workers who have been fired or 

laid off or furloughed would end. Again, 

a major cost to these U.S. companies, a 

major source of their uncompetitiveness is they are paying lots of 

money, tens of millions or billions of 

dollars for people not to work, for people not to work. 

That is a plan I could support. That 

is not putting the cart before the 

horse. That is getting things in the 

right order, nailing down that essential 

restructuring now before any taxpayer 

dollars go out the door. 

A second alternative I could support 

would involve a formal bankruptcy 

process. A lot of folks make the argument that bankruptcy is not an option, 

that consumers will never buy a car of 

a company in bankruptcy; they don’t 

know if the warranty will be there or 

be good 6 months or a year from now. 

We can fix that problem. We can address that problem with appropriate 

limited Government assistance and 

participation in the formal bankruptcy. 

Specifically, I would support a plan 

whereby the Government could play 

that role in two limited, specific ways: 

one, backing up the warranty obligations of the companies with the full 

faith and credit of the U.S. Government so consumers can retain that 

confidence and, two, providing debtorin-possession financing if that is necessary. I believe the Government playing that crucial role, or something 

akin to that, can make a traditional 

bankruptcy process work. 

Again, Mr. President, I stand before 

you and my colleagues in the Senate— 

indeed, all the American people—to 

urge us to adopt one of those alternative paths, to urge us to think outside the tiny constricted box folks have 

tried to put us into and find a third 

way, a better way which does exist. 

There are folks who argue it is this or 

bust. Quite frankly, that is baseless 

fear mongering. There is another way. 

There is a third path and a better way. 

I have outlined two just in the last few 

minutes. Let’s choose that better path. 

Let’s do the responsible thing. Let’s demand the fundamental core restructuring it will take for these companies 

to survive. And let’s demand it and nail 

it down now, not throw billions of taxpayers’ dollars at them simply upon 

the request that they sit down to begin 

to think about such restructuring. 

That is the plan before us. That is unreasonable. That is not an appropriate 

role for the taxpayers. But these two 

alternatives I outlined would be far different, would demand and ensure that 

core fundamental restructuring happens. 

Mr. President, I urge all of my colleagues, Democrats and Republicans, 

to join me in voting no on the important vote tomorrow morning on the 

present plan and to say yes to real restructuring, fundamental core restructuring that can save a maximum number of these jobs in America. 

I yield the floor, and I suggest the absence of a quorum. 

The PRESIDING OFFICER. The 

clerk will call the roll. 

The legislative clerk proceeded to 

call the roll. 

Mr. MCCONNELL. Mr. President, I 

ask unanimous consent that the order 

for the quorum call be rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

Mr. MCCONNELL. Mr. President, 

these are, indeed, turbulent times for 

the U.S. economy. Over the past several months, Americans have seen 

giant companies fail, significant job 

losses, and, after unprecedented problems in the credit markets, the frightening prospect of total disarray within 

our Nation’s mainstream economy. 

The crisis in the credit markets came 

at us quickly. We were told that urgent 

Government action was needed in order 

to shore up the broader economy and 

that failure to act would lead to a complete collapse of consumer credit, the 

very lifeblood of our Nation’s economy. 

Under ordinary circumstances, I would 

have opposed such a measure. Government intervention in the marketplace,