Retirement Fairness and Emergency Relief Act of 2008

Mr. Speaker, pursuant to House Resolution 1534, I call up the bill (H.R. 7321) to authorize financial assistance to eligible automobile manufacturers, and for other purposes, and ask for its immediate consideration.

Mr. Speaker, at the outset I ask that all Members have 5 legislative days within which to revise and extend their remarks on this bill and include extraneous remarks and material thereon.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, we consider this bill in a context, a context framed by the report last Friday of a massive loss of jobs in the American economy. This economy is in the worst shape that it has been in since the Great Depression.

We are facing a double hit, a credit crisis brought on by a variety of factors, but resulting now in a serious lack of confidence on the part of investors and a deterioration in the physical parts of the economy, which have combined to cause a serious, deep recession.

That is relevant because there have been suggestions that we could afford to allow the three domestically owned auto companies to founder, that there are other sources of automobiles, that they could be required to declare bankruptcy, to, therefore, not pay suppliers, to cut back substantially on money owed dealers, to reduce by large amounts the workforce and the compensation of the workforce, to take one of the major factors of the American economy and substantially reduce its economic impact.

I think that would have been a mistake in any economic period, but to contemplate the severity of that blow to our economic activity at this time is to invite further deterioration of an economy that has already deteriorated beyond what people expected and beyond what the American people ought to have to tolerate.

The bill is a limited bill. It is the product of a compromise, the terms of which were largely dictated by the President of the United States. I am struck, Mr. Speaker, by the lack of confidence that has been expressed on the Republican side of this House, not in the auto industry, but in George Bush and the people he has and will appoint.

The amount of money here, $15 billion, is a loan. It is a loan far more likely to be repaid than many of the much larger amounts that the Bush administration and the Federal Reserve, working with them, have advanced to Citigroup and AIG and the number of other entities.

It is $15 billion because the President said no new money, not even money from the $700 billion troubled assets fund, the TARP. This Congress voted a month or two ago, 2 months ago, to advance $25 billion to the auto industry to promote innovation, which everyone agrees is necessary. It wasn't just to the Big Three, it was to any applicant who was going to use this money to try to innovate.

The President said, to our dismay, he would veto any legislation trying to keep the auto industry out of bankruptcy that used any funds other than that $25 billion that had already been voted for that purpose. The Speaker, to her credit, resisted what I think was a strong temptation to engage in a dispute with the President that would have killed any effort to get legislation and instead, perhaps to his surprise, she agreed with him and said we would live with that constraint.

So the amount of money that is here is both in amount and, in short, exactly what George Bush wanted. This is an amount of money that George Bush told us we could make available.

We have made it available in a form that makes it overwhelmingly likely that it will be repaid. It is a loan with the American Government in a super senior position in terms of repayment and where there were some potential problems with that because of clauses in other agreements, heavy collateral.

So this $15 billion is very likely to be returned if the program fails. That's the worst case.

We will have advanced $15 billion, we will get it back in 3 months because disaster cannot be averted, but we are not willing to say that disaster cannot be averted without trying.

What this bill then says is the President of the United States, George Bush, shall designate an administration official to preside over a process of hard negotiation with all of those who have a share in this industry, the companies, of course, the bondholders, the workers, the suppliers and the auto dealers, and make it clear to them that if they are not willing and able to come together and reduce costs and put in place a program that makes it possible to envision a future in which more efficient cars are made and sold with a great likelihood of success, then not only will there be no more money than the $15 billion, but the $15 billion will have to be repaid.

Well, apparently my Republican colleagues, again, do not think that the Bush administration has within its ranks anyone capable, with all the help that they have been given, of beginning that process. Some have said, no, make them go bankrupt.

There is nothing about bankruptcy that cannot be accomplished within the framework we have said except the ability to unilaterally say ``no'' to this or that class of people who are owed money. All of the powers that you could accomplish in reorganization in a bankruptcy are given here, and the enforcement power is that the money will be withdrawn if this is not done and the entities will collapse.

We have provisions in here that make it impossible, if the Bush administration and then the Obama administration coming after them, say so to have money that was, in part, provided by the American taxpayer, used to finance activity in other countries. That doesn't mean American investors should never be in other countries. It does mean that taxpayer dollars made available in these circumstances shouldn't go to other countries. Then the question is, then, well, why the haste? We are hastily reacting to very fast-moving events.

A month ago it did not appear that the car companies would be in such dire straits. Car companies all over the world have been hurt by the credit crisis. Automobiles are paid for by credit. As credit has tightened up substantially, and as people have lost their jobs, there has been a greater than anticipated fall off in auto sales. Of course, the auto companies have made mistakes in the past, a lot of people in the industry have, including consumers.

But we find that the rapid deterioration in the general economy, it hasn't caused the problem for the automakers, but it has exacerbated them and greatly shortened our time horizon.

This bill is intended to keep them from going bankrupt between now and March 31. It does it in a way that will allow us to recapture the money if that effort fails. It does express the belief that, done properly, in conjunction with other things, things that could unstick the credit market, funds that we hope will be made available under the troubled assets program to auto dealers, who have a very real claim here, and we will be pushing for a program that will include them and funding be made available. Several Members of this House have spoken out strongly in favor of doing that.

We believe it is possible, and likely, that as the economy gets better, and as they continue the movements they have already made towards cars that are likely to sell and be more energy efficient, that we can survive this.

There are some Members who have consistently opposed any intervention, but this administration sent over $100 billion to AIG. Citigroup has been the recipient of very large amounts of money. I do not understand how people can have not made any effort to undo the administration's intervention with AIG, well over $100 billion, and then try and stop about one-seventh of that sum as a loan to the auto companies.

Yes, credit and finance are important, but the physical work done by working class and middle-class Americans in auto companies, in car dealerships, in the small businesses that are other suppliers, cumulatively, are just as important. To give up now on the auto industry would be to condemn the American economy at one of its most vulnerable periods in our economic history to a degree of further hurt, and the American people deserve better.

House of Representatives,

Committee on the Judiciary,

Washington, DC, December 10, 2008.

Hon. Barney Frank,

Chairman, Committee on Financial Services, House of

Representatives, Washington, DC.

Dear Chairman Frank: This is to memorialize the provisions

in H.R. 7321, the ``Auto Industry Financing and Restructuring

Act,'' that fall within the rule X jurisdiction of the

Committee on the Judiciary. In particular, there are several

provisions in section 12(d) and (e) that alter the normal

operation of the bankruptcy laws; section 19(c) provides the

annual cost-of-living salary adjustment for the federal

judiciary: and section 19(d) precludes private antitrust

suits regarding certain consultations between a covered

automaker and its employees, dealers, suppliers, and

creditors.

In agreeing to be discharged from further consideration of

the bill, in order that it may proceed without delay to the

House floor for consideration, the Judiciary Committee does

not waive any jurisdiction over subject matter contained in

this or similar legislation. We also reserve the right to

seek appointment of an appropriate number of conferees to any

House-Senate conference involving this important legislation,

and would ask your support if such a request is made.

I would appreciate your including this letter in the

Congressional Record during consideration of the bill on the

House floor. Thank you for your attention to this request,

and for the cooperative relationship between our two

committees.

Sincerely,

John Conyers, Jr.,

Chairman.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself 30 seconds to note that I am surprised to hear my friend argue that the bankruptcy courts have more automotive expertise and engineering and finance and industrial policy expertise than is present in the whole Bush administration. I think he is too pessimistic about that and too much supportive of the bankruptcy process.

Second, I would also just recall the very thoughtful remark of our colleague from Texas, Ms. Jackson-Lee, who noted that those who thought bankruptcy was a disaster for mortgages appear to see it as a panacea for automobiles. Many of us fail to see how that transformation took place.

I yield 2 minutes to the gentlewoman from Detroit (Ms. Kilpatrick).

(Ms. KILPATRICK asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I now yield 3 minutes to the dean of the House and a great expert over time on the auto industry, the gentleman from Michigan (Mr. Dingell).

(Mr. DINGELL asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I think we've gotten an imbalance of time here, so if it is all right with the gentleman from Texas, I would reserve and defer to him for another speaker or two to even out the time.

I would continue to reserve.

Mr. Speaker, I yield myself 30 seconds to say that my friend from Georgia apparently doesn't trust the auto companies to know what's in their own interest. He says that the provision in our bill that gives the administrator the ability to cancel a decision, which we have in there as protection against money being sent overseas, is way too interventionist, and instead, they'd be better off with bankruptcy. That's a choice they will be free to make under this bill.

This bill doesn't force anybody to apply for the money. Any company that thinks the provisions of this bill are too burdensome and too interventionist retains the full authority to run to bankruptcy.

I will say this. I yield myself 15 seconds. They think bankruptcy is a lot less attractive than the gentleman from Georgia. But understand, he says, protect the companies from this intervention which keeps money from being sent overseas. Let them go bankrupt.

None of them want to make that choice, but if they do, this bill leaves them free to do it. It doesn't force them to take the money. They still have the joys of bankruptcy which the gentleman from Georgia explained to them.

I yield 2 minutes to the gentleman from Ohio (Mr. Kucinich).

I yield the gentleman 30 seconds.

I would reserve again. We have got an imbalance that we created.

I yield 1 minute to another long-time distinguished expert in the field, the gentleman from Michigan (Mr. Kildee).

Mr. Speaker, I reserve the balance of my time.

I yield the gentleman an additional 30 seconds.

Mr. Speaker, I will take 30 seconds to say that my friend from Arizona says how can we assume that one bureaucrat would know more than the marketplace. Well, it's not harder to do that than to assume that one bankruptcy trustee would know more than the marketplace. Bankruptcy is a suspension of the marketplace. I am puzzled by this double standard here. Let's leave it to the market by appointing a bankruptcy trustee--a total abnegation of the concept of the market--and the appointment of a lawyer who is less likely, it seems to me, to have the expertise than the whole Bush administration might be able to find in industrial matters.

I yield 1 minute to the long-suffering and extremely patient gentleman from Missouri (Mr. Clay).

(Mr. CLAY asked and was given permission to revise and extend his remarks.)

I yield 1 minute to a member of the committee, to the Chair of the Subcommittee on Financial Institutions and Consumer Credit, the gentlewoman from New York (Mrs. Maloney).

Well, I am personally prepared to close. I would not be allowed to, so I have several more speakers.

I now yield 2 minutes to the gentleman from Michigan, who has been, as I can personally testify, the most ardent advocate in responding to this automobile crisis, Mr. Levin.

If the gentleman would yield, the answer is, yes, that clause does apply. We would want an automobile manufacturer to be able to use any of its existing unfunded credit facilities as a source of liquidity. So we clearly intend for the savings clause in the subordination provision of the legislation to cover unfunded committed credit facilities in effect as of December 2.

Let me inquire of the gentleman: Does he have only one speaker remaining?

Then I yield 1 minute to the gentleman from Maryland, the majority leader.

Mr. Speaker, I yield 2 minutes to the gentleman from Colorado (Mr. Perlmutter).

Mr. Speaker, I will now speak, and I will have one speaker after that. So when I'm through, it will be the turn of the gentleman from Texas to do his closing because I'm retaining one speaker after myself.

I yield myself 1\1/2\ minutes.

Here is the dichotomy: Bankruptcy versus a piece of legislation which says to the administration--the incoming and outgoing--you do what you hope to accomplish in bankruptcy but with more flexibility, with a greater pool of people to call on.

We've heard mocked the notion that either this administration or the next would have within its ranks expertise in economics and industrial organization, and we're told, ``No, no. That doesn't work. Find a bankruptcy trustee.'' I think they get the worst part of that argument if they listen to it.

Beyond that, we have consumer marketing issues. The three companies are convinced--and almost every expert I talked to agrees with them--if they declare formal bankruptcy, their ability to sell cars is damaged. People buying cars want to know they will have a continuing relationship with an entity that will service the cars and make parts for the cars.

So this continuing longer term relationship makes bankruptcy far more of a problem for them than for an airline where your contingency was just to buy one seat and nothing further.

But again, the greatest illogic is to argue that somehow in the bankruptcy courts with a bankruptcy trustee, we were going to tie it to the lawyers. You get a far greater degree of expertise than either one of the two Presidential administrations could find within its ranks of economists and engineers and others. Therefore, we believe that our solution is the preferred one.

Mr. Speaker, in very shaky opposition, I start out claiming the time, but I am open minded on the subject, so I claim the 5 minutes.

Mr. Speaker, as evidence of my open- mindedness here and being willing to listen, I will yield 2 minutes to our very able committee colleague and cosponsor of this amendment, Mr. Green.

If the gentleman will yield, yes, we will have a recorded vote on this.

I believe I have 3 minutes remaining?

Well, I intend to use the 3\1/2\ minutes to speak enthusiastically for this amendment now for a couple of reasons.

First, the merits of the amendment. We were told by the Treasury Department that they would get more lending done. Some people unfairly said that the bill we passed didn't have good oversight. It had a number of pieces of oversight, including the best oversight you can have in this Federal Government, the Government Accountability Office, an outstanding organization.

We worked with them, and they were there on the first day of this program. We had a briefing with them. They have given us a report, and the report said that Treasury was not doing a good job of seeing whether the people who received the capital injections were, in turn, lending.

We heard that anecdotally, we got a confirmation that Treasury wasn't measuring. What particularly distressed me was Treasury didn't say, well, you don't understand how hard it is. Treasury said, you are right, we are not going to try, that we will judge the overall success of the program without doing that.

Now, I will give Mr. Kashkari credit. Today, at a hearing we held-- and we called a hearing just to deal with this

issue--he indicated they now do plan to do it. But I think given the initial reluctance, this amendment is very important.

For Members who voted for the TARP and want to see that vote vindicated, you need to vote for this amendment, because it makes it valid. But there is one other thing you have to do. Let me ask you another procedural question. This is the last train out of the legislative station this year.

So I would advise Members, if you believe that we need to put pressure on the Treasury to have the TARP do more lending, you have to do two things. You have to vote for the LaTourette amendment, but then you have to vote for the underlying bill. Because I would advise Members, if you vote for the LaTourette amendment, and you then vote against the bill, Mr. Speaker, I would caution Members going back to their districts and taking credit for having voted for an amendment into a vehicle which they then crashed into the sea.

So the only way the LaTourette amendment will have any effect, and I hope it will have effect because it's important, is if the bill to which it is about to be attached passes.

So I congratulate the gentleman on an extraordinary amendment. I am envious that I didn't think of this strategy to help get the bill passed, but I will acknowledge my strategic better in this case. That may sound ironic, but it's the case.

If you vote for the LaTourette amendment--which I think does a very important job of improving the TARP--and you then vote against this bill, you have completely and totally negated it.

Now you may, Mr. Speaker, have Members here who find it of value to be on both sides of this issue, to take credit for improving the TARP in theory, but disimproving it in practice, but I would hope that most of us would not want to be in that position. So I urge Members to vote for this, and having voted for this important thing, the gentleman is right, the gentleman from Ohio, he did put it in a separate bill. But that separate bill is not going anywhere.

There will be no further legislative work. So if you believe that we need to have the banks who have not been lending, and who have received part of the TARP, relend, vote for the amendment, and vote for the underlying bill.

Mr. Speaker, I demand a recorded vote.

Mr. Speaker, I first want to thank Chairman Barney Frank and his entire Financial Services team and committee for the outstanding work they have done with this very difficult situation for the last month or so. Thank you, Barney, and for the full committee. The Michigan delegation in a bipartisan way worked feverishly to make this happen. Thank you very much.

America is at a crossroads, a crossroads on whether America will be a first-rate country as we move through this century. Seventy years ago, my grandfather, as well as hundreds of others, came to this part of the country

from South Carolina to the midwest, to the manufacturing base of America, the base that built the middle-class in this country. Without the manufacturing, there would be no middle-class in America. Do we want to forsake that today? I hope not.

The American automobile industry is the military equipment builders of our country, from World War II and every war thereafter, building the tanks, the ammunition, the body armor and the like. It will be a mistake for us if we don't preserve this industry.

Three million-plus direct jobs with another 10 million from insurance, health care, security. You name it, those are 13.6 million Americans affected by this automobile industry. We must preserve it.

The middle class is dwindling as we speak. With all the problems America has, this is not the time to kill, if you will, the only manufacturing base we have left in our country. We already yielded the electronics industry. We yielded the fabric and the garment industry. Manufacturing is one of the tools that can keep our country alive. I hope you will vote today and save this most vital industry.

I mentioned my grandfather. I am the next generation after that. Because of the manufacturing industry, the automobile industry specifically, we have been able to send generations of young people who are now 40, 50, 60 years old to college, the manufacturing industry.

Vote for this bill. Don't do it wrong. Let's do it right.

Giving thanks to God, who is the power, force and director of my life, I thank the Democratic Leadership and my colleagues in the Michigan delegation for their continued hard work, objective analysis and hard questions for both automobile manufacturers and taxpayers. As an enthusiastic supporter of the automotive industry, I, along with the unanimous agreement of the Michigan delegation, seek a balanced, fair solution for American taxpayers, manufacturers, dealers, and suppliers to the automobile industry. A large part of that solution is this bill, crafted by Chairman Frank and Members of the House Financial Services Committee on which I once served. This bill will provide $15 billion in bridge loans to help struggling automakers survive while they prepare plans to restructure their companies to build more competitive, fuel- efficient, and technologically-advanced vehicles. This assistance will not only help manufacturers, but it will help the workers, the dealers, the suppliers and the 13 million jobs that are directly and indirectly affected by the largest industry in our Nation--the automobile industry.

In addition, this bill, which would amend current law, demands taxpayer protections such as limits to executive compensation, including a ban on so-called ``golden parachute'' payments, a prohibition on dividend payments over the life of the loans, rigorous independent oversight, and provisions for the government taking warrants and allowing the taxpayer to profit in any upside of the restructuring. This is a fair balance for both the manufacturers and American taxpayers. If the Big Three were to collapse, there would be a loss of personal income of close to $400 billion, with a combined loss of tax receipts of $156 billion, over 3 years, according to the Center for Automotive Research. With the interdependence of Mexico, Canada and the United States because of the North American Free Trade Agreement (NAFTA), this vastly underestimates the ultimate impact if the Big Three were to go bankrupt.

With the recent loss of more than half a million jobs in one month, in our Nation, Federal assistance to the automotive industry is needed immediately for our economic, military, and energy security and safety. A government-supported restructuring of the auto industry is urgently needed for our economic, military and energy security. General Wesley Clark recently wrote that ``some economists question the wisdom of Washington's intervening to help the Big Three, arguing that the automakers should pay the price for their own mistakes or that the market will correct itself. But we must act: aiding the American automobile industry is not only an economic imperative, but also a national security imperative.''

This is an opportunity for Congress to do four things. One, it is an opportunity to get our country to energy security or energy independence. Two, it is a chance to ensure that, unlike our textile and electronics industry, to preserve and protect our manufacturing base, the last industry in which America still holds a slight but precarious lead. Three, it can be a way in which we get the manufacturers toward building the vehicles that Congress mandated that they build. Four, we can preserve the jobs and businesses of dealers and suppliers. In all of the discussions of saving the manufacturers, there has been little, if any, discussion to save the thousands of automobile dealers and suppliers to the automotive industry.

Congress has been advocating that our country become either energy independent or have energy security. Indeed, President Richard Nixon challenged that our Nation become independent on foreign oil in the early 1970s. Although the automotive industry is in a crisis, this is truly an opportunity to start a major reorganization and reprogramming of the entire automotive industry. In less than 2 years, General Motors will produce the first practical all-electric motor vehicle. This is a welcome opportunity, and is a development that all Americans should embrace. By being the first to produce a battery that can get hundreds of miles per charge, the United States can be the first in this manufacturing technology. This will create thousands of green jobs, clean up the air, and make us less dependent on foreign sources of fuel. This achievement is right around the corner, as GM is set to bring the Chevy Volt to market in less than 2 years. In less than 10 years, these batteries and fuel cells can be, and should be, built in the United States.

Second, we need to preserve the automotive industry as it is the base of manufacturing in the United States. Second only to the strong faith that Americans have in one another is the strength of our economy. Our modern economy was built by companies like General Motors, Ford, and Chrysler. These are the companies that essentially built this country to victory in World War II and every military conflict we have had ever since. These companies not only built the tanks, the Jeeps, the trucks that support the women and men in our military, they often created the technologies that allow us to have navigational systems in our cars, brakes that last for thousands of miles, and protect our bodies in accidents. We cannot afford to lose this innovative intellectual property.

The auto industry has come to the rescue, once again, for our women and men in the military. The Humvee, the Stryker, and the mine- resistant ambush vehicles, and the like are built primarily in Michigan but entirely in the United States. As General Wesley Clark said, ``the lives of hundreds of soldiers and marines have been saved, and their tasks made more achievable, by the efforts of the American automotive industry. And unlike in World War II, America didn't have to divert much civilian capacity to meet these military needs. Without a vigorous automotive sector, those needs could not have been quickly met.'' Our economy and our troops cannot survive the loss of the automotive industry.

Third, the manufacturers know what is at stake today. It is not only their individual survival, but whether our country suffers a recession or a depression. We cannot afford, at this perilous time in our economy, the shut down of any company. Any form of bankruptcy would tear what little confidence consumers have in the auto industry to shreds by decimating consumer demand and forcing thousands of suppliers who need the cash flow from the auto manufacturers into immediate default. This legislation would allow time and cash for the manufacturers to make the necessary and needed change in their vehicles, again mandated by Congress, for the long-term energy self- sufficiency and environmental protection we seek. This legislation does just that.

One in every 10 jobs in the United States is somehow linked to the automotive industry. After the purchase of a home, the purchase of an automobile is the largest purchase for the overwhelming majority of America's consumers. Michigan, specifically my home city of Detroit, has been the home of the automotive industry for decades. More than 13 million jobs are directly or indirectly rely on the automotive industry. The losses of the automotive industry have been massive. In 2005, General Motors, which is headquartered in my Congressional District, lost more than $5.6 billion on its North America operations alone, with Ford losing $5.5 billion during the same period of time. GM's share of the market, which used to be 36 percent in 1990, had shrunk to 26 percent in 2005. Ford's 1990 share of the market, which was 24 percent, was 17 percent 2 years ago. Production for Ford and GM has dropped 26 percent since 1999.

In the wake of these losses, Michigan and our country have lost a significant number of jobs. Both GM and Ford announced a series of plant closings in North America, with an estimated loss of 60,000 jobs through layoffs and early retirement buy-outs. According to the Bureau of Labor Statistics, in 2005 the automotive industry lost a total of 215,000 jobs, and stated that ``industry employment is headed downward and is not likely to recover for several years.'' This situation does not get any better for those related industries supplying automobile parts, providing insurance for automobiles, or selling vehicles wholesale or retail.

While domestic manufacturers are not entirely blameless for these losses, a significant factor has been the way in which China has

done business with the Big Three. One of the U.S./China Commission's conclusions, to which I testified 2 years ago, was ``the many subsidies provided by the Chinese government to the auto industry will quickly distort the nature of the market. This will be true especially in the United States, where markets are most open. The Chinese challenge to the U.S. auto industry is a significant assault on American manufacturing, and that assault is increasing in magnitude and in pace.'' Are we willing to concede to other countries, perhaps China, our manufacturing base?

Finally, I am worried about the health of automobile dealers and suppliers, specifically ethnic minority automobile dealers and suppliers. It is my understanding from experts in the field that up to 75 percent of ethnic minority new car dealers, if they do not receive financial assistance within 60 days, will fail. In a meeting two weeks ago with the Speaker and the House Democratic leadership, the manufacturers estimated that more than 700 dealers are expected to close their doors before the end of the year. In all of this discussion about helping the manufacturers, it is only fair that some of this help go directly to the ethnic minority dealers and suppliers who are the backbone of their communities and of the automotive industry. Ethnic dealers and suppliers are first generation dealers and suppliers and simply do not have the economy of scale of their majority counterparts. As we move forward with this legislation, it is my hope that we provide immediate assistance to those who most need it--ethnic minority automobile dealers and suppliers.

We face tough times. The automotive industry can succeed, with the help of Congress, once again. The automotive industry has made mistakes, and all of the manufacturers present will tell you that I have worked with them to improve their product, outreach, and business model. Here, in Washington, DC, it is often hard for legislators to truly appreciate how difficult life is for the rest of America. In Michigan, we face record foreclosures, unemployment and job loss from manufacturing. We must save the automobile industry for the future of not only the industry but for the state of Michigan and our country. We must not repeat the mistakes we made in giving away our textile and electronics industry to other countries. We must do all we can to retain this vital segment of America.

I thank the gentlelady for yielding.

I rise in support of this important legislation and commend Chairman Frank for his persistence in bringing a very focused, disciplined bill to the floor and thank Mr. Bachus for his leadership as well.

As Speaker of the House, I am pleased to rise to quote another Speaker of the House, Sam Rayburn, a legend in our country, certainly in this Congress. He served here with great distinction, as many of us know from the history books and some of us saw as students, and he said the following. He said: When I was a child, I lived way out in the country. I'd sit on the fence on Sundays and wish to God that somebody would ride by on a horse or drive by on a buggy, just anything to relieve my loneliness. Loneliness, he said, consumes people. That's why I'm so glad to see that today farmers have cars. And he goes on to say what that progress meant in the life of developing a sense of community.

Since the days when the Model Ts first rolled off Henry Ford's assembly line owning a car has been part of the American dream. I know when I was young and when the new models would come out it was a very festive occasion. It has been for a long time. I just haven't kept up with all the cars. But today, the American automotive industry is imperiled due not only to recession and a credit freeze, but because it has been on the wrong track for long-term competitiveness and job creation.

Today, we are considering legislation not as life support to sustain a dying industry but a jump start for an industry that is essential to our country's economies, economic health. One in 10 American jobs is linked to the domestic auto industry, and it is a key pillar in an American sector critical to our national security and economic competitiveness for decades to come.

This legislation is about offering Detroit, and America, a chance to get back on track. This legislation is important. It is built on four principles, and actually it comes down to a question of tough love, tough love for an industry whose success is essential to our economic success, whose jobs are important to our workforce, whose innovation is essential to our progress, and whose manufacturing and technological and industrial base is also essential to our national security.

There are four principles in the bill. First, when we ask taxpayers to put up money to fund this restructuring, we must have accountability to the American people. The President will designate a car czar to oversee the industry's restructuring. The taxpayers get a return on their investment or are first in line to be repaid. I thank Mr. Frank for insisting on that provision. No golden parachutes, bonuses, or corporate jets for executives. And the Government Accountability Office and the TARP, that's the Troubled Assets Relief Program, Inspector General will provide independent oversight to protect our investment. Accountability for the taxpayer.

Second, there must be shared sacrifice. Everybody, every party to the auto sector must be present at the table. Mr. McCotter rightfully referenced the United Auto Workers making concessions, but they shouldn't be the only ones making concessions. I've called it a barbershop: When one person gets a haircut, everyone must get a haircut. That means those who are shareholders, those who are bondholders must have a cramdown on what return they get on the dollar. Suppliers have to understand the realities of what the market is for these cars. Dealers have to be treated with the respect that all of these elements deserve but with the reality of what the real marketplace is and what the market for the cars are. The auto workers have made concessions already. Perhaps they must be expedited, perhaps they must do more, but everything must be a shared sacrifice, and if one element is going to make the sacrifice, they shouldn't be asked to do so unless everyone shares in that. And the executive suite, the management of the companies, they must be part of that sacrifice as well, and I referenced that in the accountability section.

Third, the auto makers must restructure or repay. The companies must restructure to achieve viability, international competitiveness, and they must do this with fuel efficiency and reduced emissions.

And this is important for our colleagues who do not support this bill because we share many views. This has to be a tough standard because otherwise we're just putting out money for more of the same, but that is not what this legislation is about nor should it be. If they do not, the car czar can require immediate repayment of a loan if the company has not made adequate progress by February 15 to develop a long-term restructuring plan. The company will get no more Federal assistance if it fails to submit an acceptable final restructuring plan by March 31.

The list again, accountability, shared sacrifice, restructuring, and fourth and finally, there must be a commitment to innovation and efficiency.

Green is gold. Green is gold. Making a commitment to innovation and fuel economy and better emission standards makes the automotive industry in our country more competitive. People will want to buy their cars.

The legislation calls for maintaining a half billion dollars of the innovation funding set aside to help the industry retool to build advanced technology vehicles that greatly improve efficiency and reduce carbon emissions, and replenishing the remainder of the innovation funds in a matter of weeks.

Now, let me just say this. I have objected strenuously to using the green funds, the so-called 136 funds, because their purpose in our energy bill last year was very specific. It was for advanced, innovative manufacturing technology. In other words, it was for the retooling and making sure that companies had funds for them to research, develop, and benefit from that funding. The administration insisted that money be used instead for this restructuring period of time. I reluctantly agreed only with the idea that the money would be replenished, because without their advanced manufacturing technology, we are not going to have the progress necessary to compete internationally and domestically, for that matter. And most of that is about the environment. It's about the greening of the automotive industry.

I know the automotive industry can do it. Do you know, my colleagues, that in Europe this year the car that took first place in the ratings there was a GM Opel, a GM Opel, a General Motors Opel? Second place went to Ford Fiesta. Over 100 points behind them was Volkswagen. So these are General Motors- and Ford-made cars. Ranking just 1 point behind was Ford, 100 points or more behind was Volkswagen. These are American company-made cars in Europe that they have not chosen to sell in America.

Something is wrong with this picture. We know that in Latin America the flex-fuel cars for years have been sold. They were American-made cars, made by American manufacturers. Millions of them. But the industry chose not to advance them here because they made more money off of SUVs and the executive compensation and bonuses were tied to SUVs. Something is very wrong with this picture.

So what we are saying here is let everybody come to the table. Everybody get a haircut. Everybody has got to get a trim, maybe a big trim. Only then can we restructure this so that we have a competitive industry looking to the future, as Sam Rayburn looked to the future when he was so excited about seeing cars for the first time, bringing the American people together, American cars that have always been part of the American Dream.

So I'm optimistic because I see us with two choices: One is the automotive industry is on the brink, and some are advocating bankruptcy. Some of the people advocating bankruptcy will make money off that bankruptcy. But that takes us down to a deep pit that over a long period of time is detrimental to our economy, harmful to our workers, and certainly does not make us more competitive internationally.

Instead we have listened to what the companies have had to say. We said you're not going to see any money until we see the plan. We've seen the plan. It was better than what we saw before. Much more needs to be done. This affords a period of time with half of what they asked for. But we want to see performance, we want to see milestones by certain dates that they are

making this progress. And we want to see a change in mentality in the executive suite in Detroit.

What a great community, what a great State, Detroit and Michigan. They have been part, again, of the manufacturing part of the American Dream. We want to throw a lifeline for success. We do not intend to afford life support so that we just have to revisit this issue again at the same status quo.

So if you're upset with how the Big Three executives have operated, if you're upset about the fact that we are not competitive internationally, if you're upset that the taxpayer dollar has to be used to be committed to this, you should be very pleased with what this legislation does because it captures your frustration with it all. It sets us on a new path to viability, and it is a test, and we will soon see in a matter of weeks if the executive suites in Detroit are willing to make the choices. Certainly there needs to be retooling of the plants. Certainly there has to be renegotiating of the contracts. There may have to be reconsideration of the management of these companies if they cannot live up to the standard of this legislation and prove themselves worthy of the taxpayers' dollar that is being placed there.

So I think that on both sides of this issue we have a great deal of common ground. I just happen to come down on the side of giving a chance, this one more chance, to this great industry, optimistic by March 31 that we will all celebrate the new path that we are going down, but certainly ready, certainly ready to admit if that does not happen because unless it is absolutely clear in the minds of the people that we are talking about, the executives, the shareholders, the bondholders, the suppliers, the dealers, all of whom I respect, and the workers, who are a very high priority for us, unless it is clear to them that concessions and serious concessions must be made or else the alternative is almost unthinkable, they will not make the necessary concessions in some cases.

I salute the United Auto Workers for stepping up to the plate, for being the model, for leading the way to say we respect this industry, we want to advance it, and we are willing to take the lead in making those concessions.

So this is an important day in the life of America when the Congress speaking for the people, who are rightfully unhappy about all of this money going to companies that are supposed to be in the free market and be competitive, but nonetheless understanding what is at risk for all of us. As keepers of the taxpayers' trust here, if bankruptcy were to occur, the additional cost in unemployment insurance and food stamps and the safety net and the revenue foregone in our tax situation, locally, State, and nationally, would exact much more of a toll than the amount of money that we would be putting forth here.

So again I salute Mr. Frank for his leadership.

And may I say that at the end of the day yesterday, the legislation that you have before us is the legislation that we conceded on several points to agree to the White House language. This is bipartisan in its nature, and it is the legislation that we said we would go forward with in a bipartisan way that the President would sign. Others have made other changes, adjustments, whatever it is. They say on the Senate side they need this and that. But we operate in good faith. We agree to concessions. And we would hope that the White House would keep its word that it gave us last night about this legislation and encourage the Senate to follow suit and the President can sign the bill so the message will be clear to the markets and to the American people, to the workers and to all concerned with this great industry that we want to share in that sacrifice as well and we stand willing to do it by voting ``yes'' on this important legislation.

Mr. Speaker, for reasons enumerated elsewhere, I strongly support this bill. It is essential that Congress take this prudent step to provide a short-term bridge loan to help preserve a viable domestic auto industry, and its far-reaching contributions to the overall long-term health of our economy, while appropriately safeguarding the interests of American taxpayers.

The bill we are considering today contains a provision creating a limited antitrust exemption for certain consultations in which a U.S. automaker may be asked to engage with its employees, dealers, suppliers, and other creditors for the purpose of reaching agreement on a restructuring plan for the automaker under the bill. As Chairman of the Judiciary Committee, I would like to emphasize a few points regarding that provision.

The antitrust laws are the fundamental legal protector of our free market system--the Supreme Court has aptly referred to them as the Magna Carta of the free enterprise system. Exemptions from the antitrust laws can be very harmful and destructive of the basic economic freedom we cherish as Americans.

For that reason, any proposed antitrust exemption should be very carefully considered as to its need. And even if a need can be clearly demonstrated, the exemption should be carefully focused and of limited duration.

In keeping with those considerations, this exemption is temporary and very focused. It is designed to give greater assurance to the various ``interested parties''--the employees, retirees, dealers, suppliers, shareholders, and creditors of a U.S. automaker covered by this bill, listed in section 6(a)(1)(B)--who will be consulting and negotiating with the automaker in an effort to reach agreement on a long-term restructuring plan for the automaker pursuant to the bill.

Some of these interested parties are reportedly uncertain as to how their participation in these consultations might raise issues under the antitrust laws. With the urgent need to move quickly on this legislation, it has not been possible to sit down with them and understand the precise nature of their concerns. Based on similar concerns that are raised from time to time in various quarters, the concerns may well be misplaced, reflecting a lack of understanding about the antitrust laws, which prohibit only conduct that harms competition, permitting the wide range of conduct that does not harm competition.

While these concerns may be misplaced, however, they appear to be genuine and held in good faith, and could therefore have the effect of discouraging the kinds of participation that is needed from all interested parties in order to enable the restructuring plans to succeed. To help avert this risk, this antitrust exemption has been carefully crafted to provide sufficient reassurance and guidance to interested parties, while avoiding the risk of shielding truly anticompetitive conduct from effective antitrust enforcement.

First, the limited exemption covers only the discussions, consultations, and meetings among an eligible auto manufacturer and its own interested parties. It does not cover joint activity among two or more automakers, which could create more risk of harm to competition. It also does not cover action taking place outside those discussions, consultations, and meetings.

Second, the limited exemption fully preserves the authority of the Federal antitrust agencies to bring enforcement action for injunctive relief to stop anticompetitive conduct should it occur. Merger enforcement authority is also preserved.

Similarly, the so-called ``per se'' offenses, such as price fixing, market allocation, and boycott, remain fully subject to antitrust enforcement. These are not kinds of conduct that someone innocently stumbles into. They are intentional schemes to subvert competition, and can be extremely harmful to the free market system and the economy.

Third, in the event that the discussions, consultations, and meetings continue for an extended period, the exemption sunsets after 3 years. In all likelihood, the exemption will quickly prove unnecessary. If not, and if the negotiations are still ongoing as the end of the 3-year period approaches, Congress can always consider extending the sunset if the exemption is truly warranted. The sunset is consistent with the recommendation of the Antitrust Modernization Commission that any antitrust exemption should be temporary.

Finally, in order to encourage whatever further guidance may be appropriate, the provision requires that, to the extent practicable, the Federal antitrust enforcement agencies be given reasonable advance notice of any discussion, consultation, or meeting covered by the provision, and the opportunity to participate.

As carefully crafted, this provision should provide whatever guidance and reassurance the interested parties may need that their good-faith efforts to cooperate in achieving the bill's important objectives for this important bedrock American industry will not inadvertently create antitrust problems, while at the same time taking appropriate care not to inadvertently immunize truly anticompetitive conduct that could severely harm the long-term health of this industry, the many economic sectors it touches, and the American economy itself.

Mr. Speaker, I rise in support of H.R. 7321. With this vote today, the Congress is acting decisively to protect American auto workers and dealers in every Congressional district in the country and sets Detroit on the path to near-term and long-term economic viability.

We cannot forget that the auto industry is the backbone of our domestic manufacturing sector--the very sector which drives our economy. Additionally, should one or more of the Big Three automakers fail, it would mean the loss of more than 100,000 jobs directly associated with the industry in my home state of Michigan and more than 3 million jobs around the country indirectly associated with the industry, such as auto dealers and auto part suppliers.

At the same time, I and my fellow Members in the Congress are wary of bailing out or rewarding companies that have so often pursued their own interests at the expense of the public good. Whether it was fighting to undermine more demanding fuel efficiency standards or dragging their feel when it came to developing electric car and hybrid technology, the Big 3 are in a large way responsible for the predicament they find themselves in today.

Now, the executives of Big 3 have come to Capitol Hill, not as titans of industry, but as caretakers of uncompetitive behemoths on the verge of collapse. They are in no position to make demands of the American people and the aid offered by the Congress today reflects that reality.

I believe that the aid package offered to the Big 3 here today extracts real, tangible, expansive reforms from the industry. With this bill we are sending a clear message to Detroit: If you are to survive, you must dramatically alter your business models, slim your corporate structure, spin off unprofitable lines, invest in the technologies of the future, and, above all else, cease producing the gas-guzzling steel chariots of the past. There is no alternative to these reforms. This bridge loan will only work if it truly serves as a bridge to the future and not as a cushion slowing inevitable decline.

Over the last month, there has been much discussion about the need for a strong central figure to oversee the dramatic changes being undertaken by the auto industry. I called for the creation of such a position and I am heartened to see that an auto czar-type position is established with this legislation.

If Detroit does its part, the Congress can and will do much to make the American auto industry the world and industry leader it once was. The $25 billion authorized in the 2007 Energy Bill and appropriated by the Congress to retrofit the Big 3's aging factories was a step in the right direction. It was my hope that this money would be left untouched during the current debate, so that it could continue to further the original purposes the Congress intended. I remain hopeful that the $15 billion appropriated for the auto companies in this Act will be refunded when we return in January with a larger Democratic majority and a change-minded new President.

Let me be clear--this bill is far from perfect. I would have preferred that a provision that mandates that bridge loan recipients withdraw from their suit against California's higher tailpipe emission standards remain in the bill. Stripping this provision will accomplish little. As my colleagues in the upper body, Senators Dianne Feinstein of California and Bill Nelson of Florida, have noted, GM and Ford have laid out business plans indicating that they intend to outperform the California fuel economy standards within a few years anyway. The fact that blocking these suits would have absolutely no effect on the Big 3's bottom lines makes these taxpayer subsidized lawsuits even more outrageous.

I also think we must acknowledge the failures in leadership which have contributed to the dire straits the Big 3 find themselves in at this time. The New York Times and others have called for the resignation of the Big 3's CEOs, citing their complicity in the current crisis and their lack of foresight and competitive instincts. I support this call because even now, there is tremendous evidence that the leadership of the Big 3 just doesn't get it.

Just today, in an interview on Fox News Channel, GM Vice Chairman Bob Lutz stated that Americans want more sports utility vehicles and large pickup trucks and that small vehicles are a bad investment.

I strongly encourage the ``Auto Czar,'' or ``President's Designee'' as it is referred to in this legislation, to push for the removal of any and all executives at the Big 3 who stand in the way of a greener, more fuel efficient auto industry.

Finally, it should not go unnoticed that during the final legislative debate overseen by the 43rd President of the United States, the current Administration chose to fight tooth and nail against strong measures aimed at furthering the fight against global warming and promoting energy independence. We are only here today because Treasury Secretary Paulson could find $300 billion to invest in Wall Street financiers who manipulated securities and other financial tools for a living, but couldn't find $15 billion to help working men and women who create products made and consumed here in the United States of America. Instead of gracefully acknowledging the will of the American people, this lame duck President yet again fought against progress. It is a fitting reminder of the politics that we leave behind with this vote today and, hopefully, of the brighter days that await us.

I encourage my colleagues to support the bill.

I thank the gentleman for yielding and for his leadership in bringing this important legislation to the body tonight.

I rise in strong support of the bridge loan of $15 billion to three of the largest manufacturers in America.

In response to my good friend on the other side of the aisle, if you're concerned about saving small businesses, there are literally thousands of small businesses that are associated with the auto industry in our country.

I would like to put in the Record a report that my office and I worked on that shows the ripple effect of the loss of these jobs in America. Over 3 million jobs are either directly or indirectly associated with the auto industry--one in seven manufacturing jobs, many small businesses, the auto dealers, the suppliers. This is a major employer in America.

Last month, we lost over 533,000 jobs. Unemployment is at 6.7 percent. If this industry fails, the unemployment rate will jump to, roughly, 8.3 percent. Our fragile economy is in a crisis. We can not afford to lose these jobs. Other countries support their auto industries. We should, too.

The Ripple Effect: Why Failure of the Big 3 Is Not an Option

The Auto Industry Employs One in Ten Manufacturing Jobs

The domestic vehicle manufacturing industry, including the

numerous companies that manufacture parts and technologies to

supply American automakers, represents over 10 percent of the

nation's manufacturing employment. A major contraction or

collapse of the domestic auto industry could have multiple

adverse affects on the economy, especially by driving up

unemployment. Serious jobs losses in the industry would also

have negative spillover effects for the manufacturers that

supply everything from tires to cutting edge advanced

technology such as advanced batteries for hybrid vehicles.

These spillover effects would harm future innovation in the

United States broadly, not just in the auto sector. Finally,

over 10 percent of U.S. exports are motor vehicles or parts,

and an additional 39 percent of exports are from capital

goods sectors such as industrial machinery that depend in

part on supplying domestic automakers. For this reason, a

major failure of U.S. automakers will have an immediate and

severe negative effect on our trade deficit, and will make

any future progress on improving our trade balance far more

difficult.

Approximately 2 million workers build or sell vehicles made by the

detroit three

Chart I shows a breakdown of the estimated employment that

depends directly on the Detroit Three, based on data from the

Department of Commerce. The production supply chain alone

relies on almost 1.5 million workers, far more than the

quarter million workers who are directly employed by the

automakers. This is because most of the workers who produce a

car work for outside suppliers who manufacture vehicle parts

and components. In addition, vehicle parts suppliers must

themselves draw on producers of other supplies and services,

ranging from steel to machine tools. The Commerce

Department's Bureau of Economic Analysis estimates that each

job in auto assembly and parts production directly supports

2.4 additional jobs in the economy through its supply chain

purchases.

Once the car is produced, it is sold and serviced through

auto dealerships that employ over a million workers,

approximately half of which sell Detroit Three cars. In

total, almost two million workers are directly employed in

the production and sale of Detroit vehicles. Only 12 percent

of these jobs are in the Detroit automakers themselves, but

all of them could potentially be threatened by an automaker

shutdown.

Multiple Studies Estimate Job Losses of 2.5 Million or More from a

Major Automaker Contraction

The two million workers connected to the Detroit Three

indirectly support many other jobs. Job loss among auto

workers would reduce spending in their communities, leading

to further job losses in retail and other sectors. At a time

of general recession, the job and consumer expenditure losses

created by a major auto industry contraction will not be made

up from other sources.

The exact number of jobs supported by this spending is

difficult to estimate. However, it is clear that numerous

additional jobs would be at risk. Three separate studies--

from Mark Zandi of the economic analysis firm Moody's

Economy.com, the Center for Automotive Research, and the

Economic Policy Institute--have estimated that a major

disruption to the auto industry would lead to job losses of

at least 2.5 million and possibly as much as 3 million jobs.

This implies that a major contraction or collapse of the

domestic auto industry could singlehandedly drive the

unemployment rate from its current level of 6.7 percent to

8.3 percent, even as job losses in other sectors continue.

The Current Financial Automaker Crisis Is Exacerbated By the Credit

Crisis

The magnitude of these losses were driven by the

combination of a massive spike in crude oil and gasoline

prices during 2006-07, followed by the credit crisis and

recession that has begun over the past year. The credit

crisis has led to a sharp cutoff in financing for auto loans,

and the general impact of the recession has led to record

drops in consumer spending. Chart 2 shows the combination of

these two factors has devastated North American vehicle sales

for all manufacturers. Total vehicle sales in November 2008

were down 37 percent from one year ago. Once recovery has

begun from the credit crisis and the recession, it is likely

that automaker earnings and sales will begin to show a

recovery as well.

American Automakers Have Already Made Major Progress on Needed

Restructuring

In 1990, MIT researchers estimated that Toyota and other

Japanese ``lean manufacturers'' were twice as efficient as

the U.S. ``Big Three'', and could manufacture a car in one-

half the time required by American firms. Today, the most

recent data finds that U.S. manufacturers have ``nearly

erased the productivity deficit against their Japanese-based

competitors.'' General Motors has increased its productivity

15 consecutive years, and now requires 32.3 hours to

manufacture a car, as opposed to 30.7 hours for industry

leader Toyota--a productivity gap of only about 5 percent.

Chrysler has now tied Toyota in productivity.

GM and other Detroit manufacturers have also made major

recent investments in improving fuel efficiency, to avoid a

repeat of sales declines associated with rising gas prices.

General Motor's 2008 model line has more vehicles with 30 or

more miles per gallon than any other manufacturer, and the

company plans the introduction of 16 new hybrid vehicles by

2010.

Auto Worker Pay and Benefits Have Already Been Slashed To Competitive

Levels

A major reason for cost difference between Detroit and

Japanese automakers is that U.S. firms must assume additional

pension and retiree health costs not faced by foreign

manufacturers. However, in 2005 and 2007 the United Auto

Workers (UAW) made major concessions in pay and benefits. The

new contract slashed starting salaries at auto plants by 50

percent, to about $14 per hour. Current UAW workers also

sacrificed all wage increases from 2006 through the end of

the contract in 2011. Most important of all, the new contract

established a health care trust fund that cut retiree pension

and health benefits significantly. For example, the new

contract will cut GM's total legacy pension and health

benefits from $7 billion to approximately $1 billion

beginning in 2010, and cuts Ford's legacy-related costs from

$16 to $3 per current labor hour.

The frequently cited figure that UAW autoworkers make over

$70 per hour is inaccurate, and is based on representing the

full fixed costs of retiree health and benefits as part of

labor costs for the current, much smaller auto-maker

workforce. In fact, the most highly paid UAW worker at a

Detroit Three automaker, a skilled trades worker with

seniority, earns about $33 per hour. The new labor agreement

cuts full labor costs, including all current and legacy

benefit costs, to $53 per hour for U.S. automakers, as

compared to $49 per hour at non-unionized Honda and Toyota

assembly plants.

Standard Bankruptcy Is Not a Viable Solution for Troubled Automakers

Companies in bankruptcy restructuring are dependent on

external financing to continue operation. In the current

credit crisis, it is highly unlikely that private sector

external financing will be forthcoming for GM or other auto-

makers that enter bankruptcy. Without private sector

financing, a standard Chapter 11 process could quickly result

in a movement to Chapter 7 liquidation, potentially resulting

in the large-scale job losses outlined above.

It is also important to note that the bankruptcy process is

designed to pay off creditors, not to protect the public

interest. During the bankruptcy process, firm management

would be unable to undertake major new initiatives to improve

technology, fuel efficiency, or productivity, since their

attention would be engaged by legal conflicts over finances.

Finally, consumers are unlikely to purchase automobiles from

a bankrupt manufacturer, due to concerns over warranties and

service.

A Conditional Bridge Loan from the Federal Government Is the Right Step

The American auto industry is under tremendous financial

pressure from a unique set of economic circumstances. If one

or more auto manufacturers go out of business at this time,

then the total costs to society will be far greater than the

loan that has been requested from government. The study by

the Center for Automotive Research found that a 50 percent

contraction in Detroit automaker employment would cause

government to lose $50 billion in the first year and $108

billion over three years due to combined declines in tax

receipts and increases in transfer payments.

Bridge financing would be crucial in helping these

companies past the current credit and economic crisis, until

recent improvements in productivity and fuel efficiency pay

off. Any bridge financing should be accompanied by strict

oversight and conditions for investment in continued progress

in improving efficiency, as well as further stakeholder

concessions.