Mr. President, it is a real pleasure to join and partner with my good friend, Senator Mikulski, on this initiative to save American jobs, help American families, support the auto industry, as she has…
Mr. President, it is a real pleasure to join and partner with my good friend, Senator Mikulski, on this initiative to save American jobs, help American families, support the auto industry, as she has just said, and put America back on wheels.
During those tough economic times, we believe this proposal will help American families afford the cars, small trucks, and SUVs they need to get to work, to take their kids to school, and encourage investment needed to boost auto sales which will help save American jobs, help middle-class families, and support the auto industry.
Selling cars, again, is one of the most important things we can do for the entire auto industry, by encouraging now tentative buyers who are worried about making the payments to go ahead and purchase. This is the best way to get our auto industry back to work and provide the jobs people need.
In my home State of Missouri and throughout the Nation car sales have declined sharply in recent months, and there will likely be a further decline as the economy struggles. Cars and trucks are one of the largest purchases for households. Most rely on some kind of financing to acquire the vehicles.
By making interest payments and sales and excise taxes deductible, this program will help middle-class families afford the cars, SUVs, and light trucks they need to get to work and take their kids to school. This should mean real savings to middle-class families who are struggling to pay a mortgage or rent, buy groceries, and afford health care.
This proposal also helps the struggling auto industry and millions of jobs that are dependent on them: auto suppliers, steel and glass manufacturers, and the car dealers.
There are closing car dealerships in Missouri. They are shutting their doors, laying off workers, cutting jobs. Others are facing real squeezes. They, too, may be facing this same crisis if they do not get people purchasing cars.
With our economy shedding hundreds of thousands of jobs over the past several months, it is critical that we act now to prevent further losses to an industry that touches the entire Nation.
Now, in addition to this tax proposal, I think we must take action to provide bridge loan financing to Detroit's big three auto companies. The idea of getting Government involved in the free market is troublesome and potentially dangerous to the health of our system, but I strongly believe we have to act in unique times of crisis when millions of workers are in danger of losing their jobs. We are clearly in this unique crisis. We are experiencing a crisis unparalleled since the Great Depression.
It is for that reason that I will not turn my back on hundreds of thousands of Missouri jobs. Now is the time to act. Unlike many other industries, the auto industry touches, as I said, millions of manufacturing and servicing jobs across the Nation.
Over 100,000 auto workers are in assembly plants, more than 1 million workers are at auto dealerships in every State, over 300,000 workers are in the wholesale end of the auto industry,
over 800,000 workers work in auto repair, and over 500,000 workers are in auto parts plants.
These autoworkers are not just in big cities such as Detroit. Autoworkers are found supporting families in small- and medium-sized communities across rural America.
In my home State of Missouri, small towns such as Maryville in northwest Missouri have 10,000 people, and 1,800 families depend upon the 200 workers at the Federal-Mogul plant. They are making steering systems. Closing that plant will be a tough blow to the Maryville community dependent upon it.
We have 500 jobs at the Dura plant in Moberly, 400 at the Gates plant in Versailles, 170 at the Modine plant in Joplin. On and on it goes, like a long list of just about every Missouri small- and medium-sized town. We cannot afford to pull the plug on the manufacturing backbone of rural America.
These auto-dependent jobs, whether they are union or not--and many are not--provide very good wages. They are manufacturing jobs that support middle-class families. They provide health care benefits for families, retirement for the elderly, and a couple weeks of paid vacation. Without these blue-collar jobs, many of these middle-class families would slip back into lower incomes with no health care, little hope for college, and an uncertain future. We have to fight for working people and their jobs and not allow their employers to go under.
Despite the real need for temporary emergency assistance to save jobs in Missouri and across the country, I do not support a blank check from the Government. I want to make sure we are not simply throwing good money after bad. It is critical that any rescue include three basic principles: First, the bill must have strong taxpayer protection. This means any bill must ensure that taxpayers are repaid for their emergency assistance and that taxpayers share in the turnaround profits of participating automakers.
Second, the bill must include executive accountability so that failed executives are not rewarded for poor management. I do not know about you, but I am offended when I read in the paper that companies getting Federal bailout money are using it to pay bonuses. Some of them said they have already set the bonuses aside. Well, if they set the bonuses aside, they set them aside as their company was going down. Getting money from the Federal Government should not enable them to make those bonus payments.
I have seen one major Wall Street firm saying it is going to stop bonuses until this crisis is over. I think that is something we should commend. I think that is a practice that ought to be followed.
Third, and most important--and this is key--the bill must include significant financial reform so that recipients of taxpayer funds demonstrate that they have a plan to ensure long-term competitiveness, health, and profitability by bringing their costs under control.
Funds should be conditioned on a strong restructuring plan for the industry and for each recipient to have funds so that this aid is a bridge to somewhere, not a bridge to nowhere. That is why I need to emphasize the need for a real financial strategy that will put the Detroit big three on the road to competitiveness, health, and profitability.
I believe we ought to set up a system where a responsible Government agency, a Secretary-level official, has to approve the continuing plans, the goals, the definable standards that must be met, and that official ought to hold them accountable for accomplishing the purposes, cutting the costs, and making the tough business decisions that are necessary to assure profitability.
Well, these are things I believe most of my colleagues want to see. I do not believe anybody wants to see the auto industry go down. But there is real concern that if we put in some money now, we may be back seeing them in the same condition several months down the road.
Well, the time has come for the auto industry to lay out for Government officials in their ability to approve the release of these funds if they have a plan. And as they go forward, they ought to be required to show the approving official that they are taking those steps that are necessary to make their plants and their companies profitable.
Some ask: Why don't we just allow the automakers to fall into bankruptcy like some in the airline industry? We all know bankruptcy has successfully allowed many airlines to get back in the air. I am afraid it would be a disaster for the thousands of parts and service businesses dependent on major automakers. How would they get credit to run their operations to supply a company in bankruptcy? How would the bankrupt company in the current crisis get the credit it needs to emerge from bankruptcy? Who is going to buy a car from a bankrupt company? What protections would they have for their warranties and other requirements they have for servicing?
Others say a financial rescue has no place in the free market. I agree that generally that is a good question. But even free markets need oversight and a safety net. That is why we have the Federal Reserve, the Securities and Exchange Commission, and the Federal Deposit Insurance Corporation. Each of these agencies is designed to take emergency actions in times of emergency. Clearly, that is what we have. That is why we should respond now.
There have been a lot of discussions on the source of funding for the auto industry, whether it should come out of the Treasury's Troubled Asset Relief Program, or TARP, or the Department of Energy's Section 136 program. I am pleased to see that there seems to be broad support for assisting the auto industry despite the differences in funding. I support either or both of these measures of support, provided we meet the conditions I laid out which include significantly laying out a plan to profitability, cost cutting that will be approved and then will be monitored by the appropriate Government official who has the power to continue to release the funds.
I will discuss in other remarks how the TARP has changed in purpose from what we were told it would be. It has continued to change. I am afraid it has caused a great deal of uncertainty, which, obviously, markets do not like. But before closing, I wish to suggest an area where there is great need and where I believe the funds under the Troubled Asset Relief Program can and should be used to give the economy a major boost, creating the jobs we badly need, and that is in State and local government infrastructure.
Despite the Government's efforts to thaw the credit crunch, State and local governments continue to face hardships in municipal bond financing. People were telling me, once we got the money into the banks, credit would loosen up and municipal bonds could be sold. So far, we are not seeing that. State and local bond and debt financing is still a problem. In Missouri and throughout the Nation, many infrastructure projects are being delayed or scaled back due to credit problems, the inability to get credit, and they have not faced it in many years.
Even State and local governments with high credit ratings are struggling to obtain affordable financing. In Missouri, for example, we have some $800 million approved in debt to rebuild our bridges. The city of Kansas City, MO, has $200 million it is ready to spend on its water and sewer infrastructure. The St. Louis Airport is badly in need of funding for $100 million in upgrades to facilitate commerce and continue to provide jobs. I believe the funds should be used to purchase those portions of those debts that can be used to put people to work in 2009. Not all of the $800 million on fixing bridges is going to be spent in 1 year, but there should be a reasonable judgment as to how much work can be started when construction season begins in the spring.
We ought to be willing to have the Federal Government provide the funding and get the debt issuance in return, which, if they fund it at the current going rate for debt with the Federal Government, should be a no-cost ultimate cost to the taxpayer or an addition to the debt. But what these infrastructure jobs will do right now is provide work so that working men and women will be able to do things such as buy cars, provide for their families, spend the money to get the economy growing again.
I urge Treasury to consider assisting the municipal bond market through the TARP program. It will not only
boost infrastructure investments, build the critical infrastructure we need to make our economy go forward, but it will create jobs. As has been said many times before by people a lot smarter than I, a good job is the best social policy we have. A good job is the basis of the economy.
What we are advocating today in the bill I cosponsored with Senator Mikulski is a way to get cars sold so they will create jobs all up and down the chain in the auto industry and provide a bridge to somewhere for the future of the auto industry so they will get their costs under control, keep them out of bankruptcy, and make the changes that are needed to be competitive in the national and the world market.
I urge my colleagues to join with us in the legislation by Senator Mikulski and also in pushing to use the TARP funds for investment in municipal bonds that will put people to work on infrastructure.