THE PROPOSED AUTO BAILOUT BILL [With Analysis] Part 1

THE ACTUAL AUTO BAILOUT BILL

To authorize financial assistance to eligible automobile manufacturers, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

Mr. Frank

of Massachusetts introduced the following bill; which was referred to the Committee on

 

A BILL

To authorize financial assistance to eligible automobile manufacturers, and for other purposes. [This bill only addresses 1/2 the US Auto Industry – The “Old” half]

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.(a) SHORT TITLE

 

 This Act may be cited as the

‘‘Auto Industry Financing and Restructuring Act’’.

(b) TABLE OF CONTENTS

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings and purposes.

Sec. 3. Presidential designation.

Sec. 4. Bridge financing.

 Sec. 5. Restructuring progress assessment.

 Sec. 6. Submission of plans.

 

Sec. 7. Financing for restructuring.

Sec. 8. Disapproval and call of loan.

Sec. 9. Allocation.

Sec. 10. Funding.

Sec. 11. Terms and conditions.

Sec. 12. Taxpayer protection.

Sec. 13. Oversight and audits.

Sec. 14. Automobile manufacturers’ study on potential manufacturing of transit vehicles.

Sec. 15. Reporting and monitoring.

Sec. 16. Report to Congress on lack of progress toward achieving an acceptable negotiated plan.

Sec. 17. Submission of plan to Congress by the President’s designee.

Sec. 18. Guarantee of leases of qualified transportation property.

Sec. 19. Coordination with other laws.

Sec. 20. Treatment of restructuring for purposes of applying limitations on net

operating loss carryforwards and certain built-in losses.

Sec. 21. Emergency designation.

 SEC. 2. FINDINGS AND PURPOSES.

(a) FINDINGS

The Congress finds the following: [So to vote for the Bill, you need to agree with these findings?]

(1) A combination of factors, including errors in the business model of domestic automobile manufacturers, and emergency economic circumstances, has prevented the domestic automobile industry from securing credit from other sources, and has led to

[and the Detroit 3’s loss of over a 150 billion dollars over the past 5 years has prevented banks and investors from loaning money to the Detroit 3 – If it is a bad bet for Professional Investors – isn’t it a bad bet for taxpayers] 

the possibility of the failure of the domestic auto[If they say they will go out of business by month end – haven’t they already failed] mobile industry, which failure would have a systemic adverse effect on the economy. [Won’t throwing 100’s of billions of dollars of taxpayer money away on a failing set of businesses have an adverse effect on the Country]

 (2) Therefore, action in the form of financial aid to the domestic automobile industry is necessary to stabilize the economy. [Auto

[How does throwing good money after bad stabilize the economy? It doesn’t!] 

 (b) PURPOSES

 The purpose of this ACT are

 

 (1) to immediately provide authority and facilities(C) preserves and promotes the jobs of American workers employed directly by the domestic automobile industry and in related industries; [Every expert that testified before Congress and every Ceo to testify before Congress stated that “additional employment cuts” and “plant closings” would be necessary as part of the “restructuring” necessary to make the Detroit 3″ competitive – why isn’t this mentioned]

 (A) results in a viable and competitive domestic automobile industry that minimizes adverse effects on the environment [I’m relieved that we will worry about the environment before wwe worry about the taxpayor];

 (2) to ensure that such authority and such facilities are used in a manner that—ties to restore liquidity and stability to the domestic automobile industry in the United States; and(B) enhances the ability and the capacity of the domestic automobile industry to pursue  the timely and aggressive production of energy efficient advanced technology vehicles;

(D) safeguards the ability of the domestic automobile industry to provide retirement and health care benefits for the industry’s retirees and their dependents;  [these are the exact “costs” that the UAW needs to make concessions on – why does the bill imply they will not be changed? – Even the GM CEO stated that GM currently has 4 retires for every “active worker” – after the projected job cuts in 2009 GM will have 6 retires for every active worker – Are the US taxpayers to pay for the benefits that GM and the UAW c an’t afford?]

 The President shall designate 1 or more officers from the Executive Branch having appropriate expertise in such areas as economic stabilization, financial aid to commerce and industry, financial restructuring, energy efficiency, and environmental protection (who shall hereinafter in this Act be collectively referred to as the ‘‘President’s designee’’) to carry out the purposes of this Act, including the facilitation of restructuring necessary to achieve the long-term financial viability of domestic automobile manufacturers, who shall serve at the pleasure of the President. [1). Will this Expert be like the “Trobled Asset Relief” Expert, who less than a month after the “TARP” was passed stopped buying “troubled assets” but continues spending taxpayor dollars however he pleases – with no transparency or accountability. 2). “At the pleasure of the President” – What? So the next President can appoint the UAW President to loot the US Treasury and Congress will have no say!]   

(E) stimulates manufacturing and sales of automobiles produced by automobile manufacturers in the United States. [They really mean “less than 1/2 of the autos produced in the US – the “New Auto Industry” isn’t included in this “handout” – some “autos” are considered “American” when the parts are made in Mexico and the cars are assembled in Canada] 

 

(b) ADDITIONAL PERSONS

The President or the President’s designee may also employ, appoint, or contract with additional persons having such expertise as the President or the President’s designee believes will assist the Government in carrying out the purposes of this Act. [Great, a whole new bureaucracy, paid for by taxpayor dollars, when there is already a system in place to do this – THE BANKRUPTCY COURTS – the Taxpayors are already fiunding the Bankruptcy Courts – why create additional expenses for the taxpayors. Does this Congress plan on giving every ailing industry their own “CZAR” so they can go through bankruptcy without calling it Bankruptcy].

(c) PARTICIPATION BY OTHER AGENCY PERSONNEL

Other Federal agencies may provide, at the request of the President’s designee, staff on detail from such agencies for purposes of carrying out this Act.

SEC. 4. BRIDGE FINANCING.

(a) IN GENERAL.—The President’s designee shall authorize and direct the disbursement of bridge loans or [without a restructing plan to make the “Detroit 3” competitive these are “bridge loans to nowhere”] enter into commitments for lines of credit to each autumobile manufacturer that submitted a plan to Congress on December 2, 2008 [WAIT ONE MINUTE – THERE WERE NO “PLANS SUBMITTED” on December 2, 2008. The Detroit 3 were given until the end of March 2009 to submit plans] (hereafter in this Act referred to as an ‘‘eligible automobile manufacturer’’ [So only 1/2 of the US Auto Industry is eligible]), and has submitted a request for such loan or commitment.

(b) AVAILABILITY OF FUNDS

All funds that are available pursuant to section 10 to provide bridge financing or commitments for lines of credit to eligible automobile manufacturers, after taking into account the reservation of funds under section 10(a)(2), shall be used for the purposes described in section 10(a). No new funds shall be available to any eligible automobile manufacturer for the purposes of this section after the date on which the President’s designee has approved restructuring plan under section 6 for such eligible automobile manufacturer. [So this funding could go on forever – there is no specific “stop date” – it is all left to the “CAR CZAR”]

(c) AMOUNT OF ASSISTANCE.—The President’s designee shall authorize bridge loans or commitments for lines of credit to each eligible automobile manufacturer in an amount that is intended to facilitate the continued operations of the eligible automobile manufacturer and to prevent the failure of the eligible automobile manufacturer, consistent with the plan submitted on December 2, 2008, and subject to available funds. [WAIT ONE MINUTE – There were no plans subitted on December 2, as was required – so now we are expected to fund loans while “the plans” are being developed! There has been no change in how they do business – no consessions from the Unions or suppliers, they haven’t identified which new plants will be closed – heck, they haven’t even shut down the “JOB BANKS” or “Full Pay for No Work” programs – enough of the talk, lets see some action]   

(d) ALLOCATION.—The President’s designee shall authorize the disbursements or commitments under this section in accordance with the allocation priorities set forth in subsections (a) and (b) of section 9.

 (a) ESTABLISHMENT OF MEASURES FOR ASSESSINGPROGRESS.—Not later than January 1, 2009, the President’s designee shall determine appropriate measures for assessing the progress of each eligible automobile manufacturer toward transforming the plan submitted by such manufacturer to the 

Congress on December 2, 2008, into the restructuring plan to be submitted under 6(b). to [Read that last paragraph carefully, it is the admission that the “restructuring plans” previously requested by Congress, were, in fact, not submitted on December 2, 2008) 

(b) EVALUATION OF PROGRESS ON BASIS OF RESTRUCTURING PROGRESS ASSESSMENT MEASURES

 (1) IN GENERAL

 

The President’s designee shall evaluate the progress of each eligible automobile manufacturer toward the development of a restructuring plan, on the basis of the restructuring progress assessment measures established under this section for such manufacturer. [What? Are they creating a new set of standards or are the standards used in other “bankruptcies” going to be applied]

(2) TIMING

Each evaluation required under paragraph (1) for any eligible automobile manufacturer shall be conducted at the end of the 45-day period beginning on the date on which the restructuring progress assessment measures were established by the President’s designee for such eligible automobile manufacturer. [THIS SURE REMINDS ME OF THE “TARP” or ‘Troubled Assets Relief Program. 1st, no one has submitted a restructuring plan, 2nd no one has defined how to measure if the plan is working – These issues have already been identified and defined – BY THE BANKRUPTCY COURTS – Why not use what is tried, tested and proven? Remeber, “TARP” authorized 700 Billion, however, the Government has extended 7 Trillion, or 10 times the approved amount, in just 2 months]   

SEC. 6. SUBMISSION OF PLANS.

(a) NEGOTIATED PLANS

(1) FACILITATION

(A) IN GENERAL

Beginning on the date of the enactment of this Act, the President’s designee shall seek to facilitate agreement on any restructuring plan to achieve and sustain the long-term viability, international competitiveness, and energy efficiency of an eligible automobile manufacturer, negotiated and agreed to by representatives of interested parties (in this Act referred to as a ‘‘negotiated plan’’) with respect to any eligible automobile manufacturer. [What? This is exactly what a “Bankruptcy does – with one major difference – In Bankrutcy – Taxpayor funded loans are not required – ZERO TAX PAYOR DOLLARS ARE PLACED AT RISK].

(B) INTERESTED PARTIES

For purposes of this section, the term ‘‘interested party’’ shall be construed broadly so as to include all persons who have a direct financial interest in a particular automobile manufacturer, including—

(i) employees and retirees of the eligible automobile manufacturer;

(ii) trade unions;

 

(iii) creditors;

(iv) suppliers;

(v) automobile dealers; and

 

(vi) shareholders.

[Obviously, a single person, THE CAR CZAR, can’t do this alone. So how many thousands of people will he hired and at what costs? Who will decide who gets hired and why? This is so much like the failed “TARP Plan” it is unbelievable. Why is it the “Detroit 3” can’t file for Bankruptcy Reorganization like every other business? Hasn’t Congress learned anything from TARP? The “TARP” hasn’t even finished setting up its “conflict of interests” protocols. protocols nexessary to make sure people are not just stealing taxpayor dollars]

A) ACTIONS OF THE PRESIDENTS DESIGNEE

(A) IN GENERAL

The purpose of achieving a negotiated plan, the President’s designee may convene, chair, and conduct formal and informal meetings, discussions, and consultations, as appropriate, with interested parties of an eligible automobile manufacturer. [Does this section eliminate the application of “Open Meetings Laws” – Does this section allow “closed doors” meetings?]

(B) CLARIFICATION.—The Federal Advisory Committee Act shall not apply with respect to any of the activities conducted or taken by the President’s designee pursuant to this Act.

 [Just what we need today – less Government transparency – So the public can’t track how its Tax Dollars are being spent. Let the “Detroit 3” use the existing “Bankruptcy Procedures where all transactions are an “open book”] 

(b) RESTRUCTURING PLAN

Not later than March 31, 2009, each eligible automobile manufacturer shall submit to the President’s designee a restructuring plan to achieve and sustain the long-term viability, international competitiveness, and energy efficiency of the eligible automobile manufacturer (in this Act referred to as the ‘‘restructuring plan’’) in accordance with this section. [I get it now – the Plans that were to be submitted on Deecmber 2, 2008 – have not been submitted – so we are going to give them the money anyway and beg them to get the plans turned in by March 31, 2009. I hope the put their dogs in the basement- I’d hate to hear that “the dog eat my plan” in March and have to give the “Detroit 3” another 90 days and Billions of additional dollars] The President’s designee shall approve the restructuring plan if the President’s designee determines that the plan will result in—

 

(1) the repayment of all Government-provided financing, consistent with the terms specified in section 11, or otherwise agreed to;

(2) the ability—

(A) to comply with applicable fuel efficiency and emissions requirements;

(B) to commence domestic manufacturing of advanced technology vehicles, as described in

section 136 of the Energy Independence and Security Act of 2007 (Public Law 110–140; 42

U.S.C. 17013); and

(C) to produce new and existing products and capacity, as described in section 14;

[Is a “Bailout Bill” the appropriate place to address “fuel” issues – I wish Congress, with its past track record, would just try to get one problem addressed at a time] 

(3) the achievement of a positive net present value, using reasonable assumptions and taking into account all existing and projected future costs, including repayment of any financial assistance provided pursuant to this Act; [This is what a Bankruptcy Court does – except, there would be NO taxpayor funds to repay]

(4) efforts to rationalize costs, capitalization, and capacity with respect to the manufacturing workforce, suppliers, and dealerships of the eligible automobile manufacturer;

(5) proposals to restructure existing debt, including, where appropriate, the conversion of debt to equity, to improve the ability of the eligible aumobile manufacturer to raise private capital; and

(6) a product mix and cost structure that is competitive in the United States marketplace.

 

SEC. 7. FINANCING FOR RESTRUCTURING.

 

Upon approval by the President’s designee of a restructuring plan, the President’s designee may provide financial assistance to an eligible automobile manufacturer to implement the restructuring plan.

SEC. 8. DISAPPROVAL AND CALL OF LOAN.

If the President’s designee has not approved the restructuring plan at the expiration of the period provided in section 6 for submission and approval of the restructuring plan, the President’s designee shall call the loan or cancel the commitment within 30 days, unless a restructuring plan is approved within that period. [Let me get this straight. The “Detroit 3” was told to “go home” and draw up “restructing plans” that would specifically identify how they would change the way the do busioness and adopt “new business models” that would allow them to survive and prosper in the future, and then – AFTER THE PLANS WERE DEVELOPED – to come back and ask Congress for money to help implement the “new plans”  – Obviously, the “Detroit 3” has not done what was required of them – This proposed “Act” hands out the money before the “Detroit 3” offers any specific proposals – There has been no substantive changes by the Detroit 3 since the last time they went to Washington to ask for this money. Please direct the “Detroit 3” to the Bankruptcy Court down the street.]

The full Congressional copy of the Bill can be viewed here: http://www.house.gov/apps/list/press/financialsvcs_dem/autobill.pdf

THE PROPOSED AUTO BAILOUT BILL [With Analysis] Part 2 – Here:  https://mcauleysworld.wordpress.com/2008/12/11/the-proposed-auto-bailout-bill-with-analysis-part-2/

One Response

  1. Goodness someone who deals in facts. What a rarity. The whole bailout business is a travesty. It shows what Washington is – a cesspool of human corruption, incompetence, and arrogance with a few decent people scattered in. visit- http://www.geezergator.wordpress.com

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