Senate Republicans, rightfully, blocked the band-aid "rescue" package for Detroit's automakers, and now Bush has decided to look for a way to use the $700 billion bank bailout package to skirt the Senate and help them anyway.
I predicited a few weeks ago that congress would come up with a package just unpalettable enough to get it filibustered so the formerly Big 3 could file bankruptcy. It looks like that is what happened, but GWB doesn't want to see it happen.
I can see his point, to an extent. At the beginning of what looks to be a long recession, having the automakers become wards of the court may deepen the economic downturn. On the other hand, spending billions to prop them up until the time is more appropriate for failure doesn't make fiscal sense when we've already increased the deficit more in 3 months than Bush 41 did in 4 years! Remember back in the 80's when we screamed about Reagan coming up with a $500 billion dollars of deficit spending in his second term. Hell, we've done better than that this quarter!
A month ago the CEO's of the Big 3 begged for $25 billion as enough to get them through. A few weeks later, they said they underestimated, and needed $34 billion. Economists who testified before Congress said that $80-120 Billion was probably a more realistic figure. So Congress of course tossed all those numbers out, and came up with $14 billion as a patch for the hole in the side of the Titanic.
It appears the final outcome will be Chapter 11 for GM and Chrysler; the question is how long do we keep them above water before it happens, and who's the next industry to get bailed out?