House Approves $25 Billion In Automaker Loans
The House of Representatives on Wednesday finally approved funding for a $25 billion loan program, to help the auto industry in retooling plants to produce more fuel-efficient vehicles. The Senate is expected to approve funding for the loans next week and President George Bush is expected to sign the bill into law.
The bill that would continue to fund the federal government in the new fiscal year starts on October 1, including a $7.5 billion to start the loan program. The loan program is an another step of the government into its involvement in auto industry operations, after it had guaranteed loans to Chrysler Corp. in 1979.
The Congress actually authorized the loans in the energy bill, that was enacted last December, which set aggressive fuel-efficiency standards and created a loan program to help automakers develop and build vehicles with higher fuel economy, but not funded. Now, they have been rumored as a bailout of the automotive industry.
Representative John Dingell, D-Michigan, chairman of the House Energy and Commerce Committee said, “Some critics will call this loan package a bailout. It is not. These loans amount to a little more than one percent of the real bailout — the one the Bush administration wants for Wall Street at a cost of $700 billion to taxpayers.”
“The loans to the automakers will cost about $7 billion and will be repaid to the taxpayer at a profit. The auto direct-loan package is a good deal for auto workers and a good deal for taxpayers,” Dingell said.
