Paulson Pledges Quick, Prudent Automaker Rescue

Treasury Secretary Henry Paulson said Tuesday that government aid for U.S. automakers was being crafted as quickly and carefully as possible.

“The automakers will get the money as quickly as we can prudently do it,” Paulson said in an interview on CNBC television. “We need to do this, but we need to do it right.”

President George W. Bush said earlier on CNN Tuesday that the United States was in a “huge recession” (in case anyone was unaware at this point), and that letting any of the Detroit three automakers collapse would only worsen the economy. “On the other hand, I’m mindful of not putting good money after bad,” Bush said. “So we’re working through options.”

Democrats are largely expecting the Bush administration to preserve the conditions for the financing that were negotiated and approved by the House of Representatives last week. The requirements included the appointment of a “car czar” to oversee the disbursement of the funds and compliance with the loan terms. Some of the conservative Republicans that helped kill the legislation in the Senate are calling for tougher concessions.

Paulson said in November that the $700 billion TARP funds should be limited to financial institutions, but reaffirmed that the auto industry is vital to the nation. He reiterated that any federal solution must lead the Detroit three to viability. After Congressional attempts to help the automakers failed, Paulson and the Bush administration are now being forced to dip into the TARP fund they sought to limit to financial institutions.

Source: Automotive News