Rep. Paul Kanjorski, D-Pa., said Congress has little appetite to provide $34 billion, and pushed to provide enough funding to keep GM and Chrysler operating March 31, enough time to work out viable business plans with stakeholders including the United Auto Workers, suppliers and creditors. He suggested a course that would force restructuring outside of bankruptcy.
"They have to restructure," Kanjorski said, urging: "Impose a super master on the board (who) can impose a settlement. If creditors aren't willing to take a haircut, impose a haircut." He added: "I can't understand why we're arguing what pot this is coming out of," but that is the primary issue separating Democrats and Republicans.
The Bush Administration want to tap $25 billion set aside earlier this year by the Energy Department to help automakers retool plants to build more fuel-efficient vehicles. Other potential sources include the Troubled Asset Relief Program and a new Congressional allocation. On Friday, Senate Majority Leader Mitch McConnell, R.-Ky., told the Louisville
that he has "not decided yet" what course he prefers.
"However the short-term funding comes is up to the Congress," said GM CEO Rick Wagoner. But he said the company is seeking about $8 billion from the Energy Department, and "we would hope it would be replenished" if it became a source of immediate financing.
Wagoner also responded once again to the suggestion Chapter 11 bankruptcy would provide a suitable forum to reorganize. He noted that GM's pension plans are funded, and the UAW has agreed to stretch out payments for retiree health benefits. "Bankruptcy doesn't help a lot on these issues, and it will cream revenues," he said.
As the hearing concluded, Frank offered an observation. "One of the things we have learned is averting disaster is no basis for a political campaign," he said. "If you do something good, people are happy. [But] avoiding something bad, people are not happy."