Good News for Detroit
The Associate Press reports that the Bush administration may leave the decision of how to spend half of the $700 billion allocated for the Wall Street to the discretion of President-elect Barack Obama’s administration.
The has told top lawmakers it does not plan to use at least half of the $700 billion bailout fund that Congress approved this fall to aid the financial industry, congressional officials said Monday.
These officials said passed the word over the weekend that he intends to leave $350 billion untouched when the administration leaves office on Jan. 20. That would mean the incoming Obama administration would decide whether and how the funds should be spent.
The disclosure comes at a time when Democrats are working to pass emergency legislation to spend $25 billion of the bailout money to provide loans to the battered auto industry.
However, with Republican opposition in a lame-duck Congress making any action on a Detroit bailout unlikely before Obama’s inauguration on Jan. 20, the question remains whether the Big Three automakers can hold out until then without filing for bankruptcy. The Bush administration has said it supports federal aid for auto manufacturers, but opposes using funds from the Wall Street bailout.
Obama has expressed support, with strings, for helping the industry, upon which millions of American jobs depend. If the incoming, as yet unnamed, treasury secretary will direct the disbursement of a large chunk the Wall Street bailout money, federal assistance could be on the way.