Departing from most of his Republican colleagues, Sen. Chuck Hagel said Thursday he plans to support short-term federal loan guarantees for U.S. automakers.
DON WALTON / Lincoln Journal Star | Posted: Wednesday, December 10, 2008 6:00 pm
Departing from most of his Republican colleagues, Sen. Chuck Hagel said Thursday he plans to support short-term federal loan guarantees for U.S. automakers.
The consequences of financial failure of the Big Three auto companies would be “astoundingly disastrous,” Hagel said, and would ripple through every community in the country.
Car dealers, banks and Main Street businesses in every town in Nebraska would be affected, he said.
If Congress fails to act, the ultimate costs, including widespread unemployment, would be far greater at a time when the country faces its most grave economic challenges since the Depression, Hagel said.
Sen. Ben Nelson previously said he also plans to vote for the short-term federal loan package.
A $14 billion bill cleared the House of Representatives on Wednesday and is scheduled for a vote in the Senate on Friday.
All three Nebraska Republican House members voted against the legislation.
Hagel said he expects a majority of his Republican Senate colleagues will oppose a cloture motion that requires 60 votes before the legislation could be enacted. Reaching that 60-vote threshold appears questionable, Hagel said.
As a member of the Senate Banking Committee, Hagel said, he has listened to all sides of the debate.
Although he still has questions, he is “inclined to support the bill as it is written” and has informed Senate leaders on both sides of the aisle and the Bush administration that is his intent.
“In the short term, the need is so urgent that I think the government has to do something,” Hagel said. “This is not a smart time to turn our backs.”
The legislation provides access to “bridge loans” that would help beleaguered General Motors and Chrysler remain financially viable while needed restructuring and reorganization of the domestic auto industry is under way, Hagel said.
“This would allow the companies to borrow money to essentially get them through the end of March,” he said.
Ford has indicated its ability to survive on its own during the short-term period leading through the first quarter of 2009.
If the companies were forced into bankruptcy, Hagel said, American consumers would question whether they should buy U.S. cars that might not be able to be serviced in the future.
“Everything has to be on the table,” Hagel said, including labor costs, union contracts, pension plans, structural and strategic reorganization of the companies and product changes.
“The car companies need some time and resources to restructure and produce the kind of (vehicles) consumers want to buy,” he said.
Reach Don Walton at 473-7248 or at dwalton@journalstar.com.