Congress takes first step on automaker bailout

WASHINGTON (Reuters) - Senate Democrats took the first step toward bailing out the nation's crippled auto industry on Monday by proposing a $25 billion loan program, a plan that faces stiff political headwinds with millions of jobs potentially riding on the outcome.

With the year's congressional calendar down to a few days, lawmakers and the Bush administration sparred over the best way to extend help to General Motors Corp, Ford Motor Co and Chrysler LLC.

"We're surprised that Senate Democrats would propose a bailout that fails to require automakers to make the hard decisions needed to restructure and become viable," White House spokeswoman Dana Perino said.

The Senate bill would, however, impose conditions. The government would take warrants for shares in exchange for aid, which would come with limits on executive compensation and a prohibition on the payment of dividends.

Automakers would also have to submit plans on how they intend to remain competitive, pummeled by plunging sales, little access to credit and a weakening economy.

Executives from the three companies are expected to amplify their calls for help at congressional hearings beginning on Tuesday.

Carl Levin of Michigan, the plan's chief advocate in the Senate, said the proposal to amend the Treasury Department's existing $700 billion rescue plan for financial services firms is the most efficient way to help auto manufacturers.

House Democratic leaders, led by House Financial Services Committee Chairman Barney Frank, released a draft of almost identical legislation later on Monday.

But the White House and many Republicans favor amending another law -- one approved in September to extend automakers $25 billion in technology loans to retool factories and make more fuel efficient cars.

MARKET FEARS

A rescue package for U.S. automakers could avert another stock market plunge like the one seen after Lehman Brothers' collapse in September.

"The reason people think failure could be cataclysmic is that there are so many companies that are tied to the auto industry," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco.

The Senate proposal comes as GM said it would delay incentive payments to its U.S. dealers by two weeks in an effort to "gain some cash liquidity" for the fourth quarter.

The payments for dealer incentives, which are made on a weekly basis, will be delayed from November 28 until December 11, GM spokesman Pete Ternes said.

Liquidity is the key concern for the automakers as their remaining cash reserves dwindle.

"If General Motors is unable to solidify government aid this week and is forced to wait for the next administration, we would become more concerned about working capital related liquidity risks... ," Citigroup autos analyst Itay Michaeli said in a note to clients on Monday.

The companies and their allies in Congress argue a bailout is justified on grounds they back one in 10 U.S. jobs.

GM, Chrysler and Ford employ close to 250,000 people in the United States and supporters claim they touch more than 4 million other jobs including suppliers, dealers, car haulers and rental companies.

Many parts suppliers and dealers have agreements with transplanted automakers as well, potentially interrupting the business of competitors to the Big Three in the short term.

A potential threat to the integrated supplier network prompted Japan's Honda Motor Co Ltd to support an aid package for its U.S. rivals.

BAILOUT SKEPTICISM

But segments of the public disagree that a rescue is in order. In interviews, Americans said the planned rescue was unfair and would make it harder to reform the U.S. automakers.

"They need to restructure. If they get bailed out they are not going to do it," said Eric Smith, a paint contractor interviewed in Chamblee, Georgia, on the outskirts of Atlanta.

U.S. automakers say they are urgently trying to overhaul their businesses to meet a global demand for fuel efficient products, like better performing gasoline engines, electric cars and more hybrids.

But industry executives say they may never get there unless the bailout is approved. They add that the shock of any collapse will shake the economy.

If the auto industry comes under severe pressure, GM Chief Executive Rick Wagoner said in a television interview on Sunday, "the impact on the whole U.S. economy will be devastating."

All three companies have rejected reorganizing under bankruptcy protection.

For the Senate measure to pass, it must gain support from both Democrats and Republicans in the narrowly divided chamber where 60 votes are needed to overcome any procedural hurdles.

Aides and lawmakers have expressed doubt about the Democratic effort with so little time and White House opposition.

Nevertheless, two prominent Republicans senators signaled they would be willing to consider a plan. Pennsylvania's Arlen Specter said he was open to supporting the automakers under certain conditions, and Christopher Bond of Missouri, expressed a similar sentiment and said action was needed now.

"I'm pleased to see there seems to be broad support for assisting the auto industry despite disagreements," Bond said.

Bush, whose limousine is made by GM, opposes a bailout using Treasury rescue funds that the administration argues are, by law, intended only for distressed financial services companies.

President-elect Barack Obama, who will be sworn in January 20, has encouraged an aid package, but not a blank check. Obama has said conditions should also include labor, suppliers and lenders so that "we are creating a bridge loan to somewhere, as opposed to a bridge loan to nowhere."

Shares of GM closed up 5.7 percent to $3.18 on the New York Stock Exchange, while Ford slipped 4.4 percent to $1.72. Chrysler is privately held by Cerberus Capital Management LP.

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Justin Haskins, editorial director of the Heartland Institute, joined Glenn Beck on the radio program to expose a shocking conversation between two Great Reset proponents — Klaus Schwab, chairman of the World Economic Forum, and Christine Lagarde, president of the European Central Bank (Europe's equivalent to the Fed).

The way Schwab and Lagarde discuss the role central banks should play in establishing societal norms, determining your way of life, and defending against potential crisis is proof that the Great Reset is upon us, Justin explained. And the scariest part is that they're not even trying to hide it. The entire, unbelievable conversation has been published on the WEF website, which you can read here.

Glenn read an excerpt from the conversation:

Christine Lagarde: At the ECB, we have now wrapped up and concluded our strategy review, which was the first one in 17 years. And I was blessed to have an entire Governing Council unanimously agree that the fight against climate change should be one of the considerations that we take when we determine monetary policy. So at least the European Central Bank is of the view that climate change is an important component in order to decide on monetary policy. ...

Can we arrive at that trade-off between fighting climate change, preserving biodiversity and yet securing enough growth to respond to legitimate demands of the population? And my first answer, Klaus, to be firm, is that to have a way of life, we need life. And in the medium term, we do have major threats on the horizon that could cause the death of hundreds of thousands of people. So we have to think life, first. We have to think way of life, second. ...

So we have to think life, first. We have to think way of life, second. How can we come together to make sure that we secure the first priority, which is life, and also protect the way of life that people have? And make sure that the cost of it is not so high for some people, that they just cannot tolerate it. I think that the trade-off that we reach will probably require some redistribution, because it is clear that the most exposed people, the less privileged people are those that are going to need some help.

"Do you understand, America, what that means?" Glenn exclaimed. "You have elites, that you never elected, that are having these meetings ... deciding what is a legitimate need for you. And telling you that your needs are going to go away in your lifetime. You may not see a time where you get wants again. Just your needs are going to be addressed. Am I reading this wrong?"

"This is absolutely what is being said here," Justin agreed. "She's very clear that we need to make sure that way of life is second to life. We have to save all these people, hundreds of thousands of people are going to die from this supposedly existential threat of climate change. And their wants, and their desires, and their quality of living, all of that has to come second."

"This is a central bank saying this. This is not an elected official, who is accountable directly to the people. This is a central bank saying, we're going to print money. We're going to use monetary policy, to impose these ideas, to rework society in order to accomplish our goals," Justin added, addressing Lagarde's call for "some redistribution."

Will Great Reset elites — not elected by the U.S. — soon be dictating to the rest of the world? Watch the video clip below to hear Glenn and Justin break it down:

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

First comes the "crisis," then comes the expansion. The federal government is seizing on the January 6 Capitol riot to take carte blanche to do whatever it wants and weaponize the event to further empower the new overlords of our country — the intelligence community.

On Glenn TV Wednesday, Glenn Beck reveals what's happening with the U.S. Capitol Police and argues they've morphed into a new arm of the intelligence apparatus, boosted by a massive increase in funding and surveillance equipment and new offices OUTSIDE the Capitol building. The Biden administration has also hidden basic details regarding January 6. Why did officials refuse to release the name of the officer who killed Ashli Babbitt? Where are the 14,000-plus hours of CCTV footage? As any intelligence organization knows, it's best to operate outside the realms of oversight.

Glenn exposes the hidden hand of government that could be used to punish and destroy innocent Americans who are only guilty of holding the "wrong" political view.

Watch the full episode of "Glenn TV" below:

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

The conditions in Afghanistan under the Taliban rule — for Americans, allies, Christians, women and more — continue to deteriorate, and the people there continue to plead that we will not forget them. On the radio program Monday, Glenn Beck gave an emotional update on current evacuation efforts, including the tragic story of one girl — an American passport holder — who was not rescued in time.

"I have a pit in my stomach like I haven't had in a while. What is happening in Afghanistan is both miraculous and horrendous," Glenn began. "What's going on right now one of the most amazing things I've ever personally witnessed — the evacuation of Americans, those [Afghans] who helped us, Christians that are dying, women that are under incredible conditions. I see things that I can't show you. I see the pleadings from people who are in safe houses, 'Please, don't forget us.' I see what they're being sent by the Taliban.

"If I die today, my entire life will have been worth it for what you have helped get done, in just the last three weeks. You have saved well over 5,000 people," he continued.

Fighting back tears, Glenn added, "I ask that you pray for those in the Middle East, that are in the midst of doing work, that a Moses-style miracle will happen. ... There are several people that are in dire need of medical care. Friday, we told you — along with the congressman from Oklahoma [Rep. Markwayne Mullin] who had just returned — [about] a father and two daughters that were blue passport Americans, and a mother who had a permanent residence, a Green Card. The daughter was very ill. And they thought, that if we couldn't get her out of there, that she would lose her legs. I got a call on Saturday morning, that we were too late, that she didn't lose her legs. She lost her life, waiting. There are now two Americans, instead of three."

Glenn showered his audience with gratitude, repeating that "well over 5000" lives have already been saved because of their incredible generosity, but lamented that there are still thousands more people yet to be saved.

Watch the video clip below to hear more updates from Glenn:

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To donate to these rescue efforts, visit NazareneFund.org or MercuryOne.org.

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.