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In financial crisis, it's still a democracy
Robert Reich
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TEXT OF COMMENTARY
TESS VIGELAND:
Michigan is among the states facing massive deficits. Last week the legislature approved $134 million worth of budget cuts. And of course the auto industry's woes aren't going away any time soon.
Today GM suspended work on a new engine plant in Flint as it awaits word on a government bailout. There's still no indication from the White House on when a bridge loan might be forthcoming.
There's been a lot of talk about how much it will cost to keep the Big Three in business.
But Commentator Robert Reich says there's more on the line than just money.
Robert Reich: I'm among those who think there's good reason to give the Big Three a $14 billion bridge loan to stave off immediate bankruptcy until they come up with a restructuring plan. But I've got to tell you, I'm deeply troubled by what I hear is the administration's likely decision to give them a bridge loan, when just last week Congress said they can't have it.
Call me old-fashioned, but I believe in democracy. And under our Constitution, Congress is in charge of appropriating taxpayer money. If Congress explicitly decides not to appropriate it for a certain purpose, where does the White House get the right to do so anyway? By pulling the money out of another bag? That other bag, by the way, called the Troubled Assets Relief Program, or TARP for short, was enacted to rescue Wall Street, not the automobile industry.
Now personally, I think there's more reason to rescue big automakers than big Wall Street banks, but what I want isn't the issue. It's what our representatives voted for. When they voted for TARP in October, they didn't say to the President, here's a $700 billion slush fund to use as you wish. They said: Here's $700 billion for Wall Street.
If it's a slush fund, everything's arbitrary. I mean, why autos and not, say, state and local governments? They're running short about $100 billion this year and as a result are slashing public services, including the nation's schools. Even as it is, TARP is shrouded in secrecy. The Treasury has burned through about $335 billion so far, and no one knows exactly how or by what criteria. Why, for example, did it set tough conditions on some banks while giving Citigroup the sweetest deal imaginable?
The dictionary meaning of a "tarp" is something used to cover things up, which is exactly we've got. But our system of government depends on sunlight, transparency, public awareness. It also depends on Congress exercising its constitutional duty to make laws and the president executing them. An economic crisis is no excuse for turning our back on democracy.
VIGELAND: Robert Reich is a professor of public policy at the University of California, Berkeley. His most recent book is "Supercapitalism."
RE: It's still a democracy
Secretary Reich is supremely correct on this point.
Allowing President Bush to allocate TARP funds to the auto manufactures is dangerous.
We, the people, through our duly elected officials - and constitution keeper of the purse strings - have already said NO to these funds at this time.
No matter how you may feel about the need (or lack thereof) of an auto bailout, our TARP legislation was never intended to send our money to the auto companies.
By doing so, we've etched away at our democracy. Moreover, what concerns me is that this constitutional point is not being hotly debated in the mainstream media - or in the halls of power in Washington.
P. Rich Rodriguez
Publisher, Rich News
I respect Reich's views, but he should understand that the political faction he belongs to, loosely described as "liberals", has led the way since the 1930s or earlier in getting Congress to pass laws granting large-scale, vaguely defined powers to the executive branch. TARP is just the latest example. It's a little late to complain now.
I don't often agree with Reich but he is spot on with this one. Since when is the Office of the President just allowed to do anything it wants, *especially* after Congress having said no?
Since the President is apparently allowed to spend or veto any funding he wants, why have a Congress? Apparently their vote means nothing if Bush can simply do as he wishes.
I'm hoping somebody like Judicial Watch steps up and challenges this in court.
I would ask Mr MacIntyre which minority he's referring to, as this Washington Post poll clearly shows the majority of Americans as being against the bailout for the Big 3.
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/15/AR200812...
Kudos to Mr Reich for standing up for the rule of law, even when it's inconvenient. I can only hope the incoming Obama administration can exercise such restraint.
A similar perspective may be found here (and the writer gets bonus points for mentioning Schoolhouse Rock!):
http://www.reason.com/news/show/130600.html
Excerpt:
Even Americans whose knowledge of the legislative process is limited to the "I'm Just a Bill" episode of Schoolhouse Rock know about the veto: If Congress approves legislation the president doesn't like, he can refuse to sign it, in which case the law can be enacted only by a two-thirds vote of each chamber. President Bush's plan to aid the auto industry relies on a more obscure maneuver: If Congress rejects a bill the president likes, he can act as if the vote went the other way.
This maneuver, unlike the veto, is illegal by definition, not to mention unconstitutional, violating the separation of powers and the rule of law.
A similar perspective may be found here (and the writer gets bonus points for mentioning Schoolhouse Rock!):
http://www.reason.com/news/show/130600.html
Excerpt:
Even Americans whose knowledge of the legislative process is limited to the "I'm Just a Bill" episode of Schoolhouse Rock know about the veto: If Congress approves legislation the president doesn't like, he can refuse to sign it, in which case the law can be enacted only by a two-thirds vote of each chamber. President Bush's plan to aid the auto industry relies on a more obscure maneuver: If Congress rejects a bill the president likes, he can act as if the vote went the other way.
This maneuver, unlike the veto, is illegal by definition, not to mention unconstitutional, violating the separation of powers and the rule of law.
Secretary Reich makes an interesting point about democracy, but at a time when democratic principles are routinely besieged and ignored by every branch of government, to seize on from which pocket come the funds for the auto industry seems fussily punctilious. Indeed the intention of the Congress clearly was to appropriate the money, and the process by which it was blocked from doing so is profoundly undemocratic: Senators representing a minority of the population employed parliamentary tactics to foil the will of the majority of both the Senate and the House.
I agree with Mr. Reich but he only tells part of the story. The language of the bailout bill was sufficiently vague and broad enough to encompass bailing out other industries. Thus the problem is why did the media not announce the bait and switch once the bill was passed. I read the text and saw the "assets and other stuff" and realized that congress had just given Paulson a blank check. so while it might be convenient to say congress gave paulson the money to rescue banks it ignores congress' failure to hem him in at the beginning.
I do not know what political affiliation Mr. Reich belongs to, but I believe should get Mr. Paulson's job.
I have heard more common-sense fiscal commentary during my short time listening to Mr. Reich than all of the years listening to the past three administrations.
Although not common, Mr. Reich is correct here.
Let's consider this: instead of giving/loaning anything to the auto companies, let's take the same $15 billion and give a $5,000 tax rebate to every American who buys an American car in the next 6 months. That's 3 million cars.
