December 10th, 2008, Fairfax, VA—Americans for Limited Government President Bill Wilson praised Senators John Ensign (R-NV), Tom Coburn (R-OK), Jim DeMint (R-SC), David Vitter (R-LA) and Richard Shelby (R-AL) for their efforts to oppose the $15 billion bailout package for the Big Three automakers.
There is a growing consensus in the Republican caucus against the bill. Top Capitol Hill sources suggest that the votes simply are not there to get the $15 billion in emergency loans to Ford, Chrysler and GM passed before year’s end.
“It’s about time that the Senate stood against the bailout madness that has permeated Washington this year,” said Wilson in a statement. “These Senators are heroes for fighting against this bill.”
“The American taxpayer cannot and must not be forced to perpetuate the mismanagement of the Big Three by financing failure. There is no excuse for putting taxpayers on the hook for keeping failed companies afloat that could much better be reorganized under normal Chapter 11 bankruptcy,” Wilson added.
Under Chapter 11 bankruptcy protection, companies have the ability to broadly restructure the scope of operations, redo labor contracts, and otherwise scale back in order to emerge from bankruptcy with a profitable business model.
“Everything that Congress says it is attempting to do, to create a deal to reorganize these companies, to return them to profitability, is precisely the purpose of Chapter 11 bankruptcy protection. The $15 billion bailout is just a reason not to go into Chapter 11. In fact, the real intention is to perpetuate bad management and Big Labor excesses at taxpayer expense,” said Wilson.
Wilson also suggested that a “structured” bankruptcy deal that has been floated in the media is just another excuse not to reopen labor contracts, “The Senators shilling for this bailout will stop at nothing to prevent normal Chapter 11 proceedings from occurring, because then the labor contracts would have to be reopened, management might be fired, etc.”
“Anything else that is being put forth by the companies or by Congress is just spin to mask this truth,” added Wilson.
The automakers have suggested that American consumers will not want to buy cars from companies undergoing bankruptcy proceedings. “That is just false,” responded Wilson. “The people are not buying the cars now, which is why they’re in this mess.”
Wilson believes that without bankruptcy, the companies are doomed to failure. “The real question everyone should be asking is, ‘Who is going to want to invest in a company that has to beg the government for loans that cannot be paid back every few months just to keep up its excessive operations?’”
“If these companies really are in that much trouble, then bankruptcy is their only option,” said Wilson.
“The American people owe a debt of gratitude to Senators Ensign, Coburn, DeMint, Vitter and Shelby for their courageous, principled stand. Any Senator who votes for this bailout will have to answer to their constituents and history for their destructive action,” Wilson added.