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KAI RYSSDAL: The date matters because as of right now there are 19 days left in the year. That would be the same 19 days that’re left until General Motors has said it’ll run out of money. Congressional Democrats and the White House thought they had a deal that would’ve solved Detroit’s problems. At least in the short term. But their $14 billion loan package didn’t survive a Senate vote last night.
So pretty early this morning all eyes turned back to the White House. And sure enough the executive branch is now considering doing something it said earlier was out of the question — taking some of the $700 billion in the TARP — the Troubled Asset Relief Program — to keep carmakers going at least until the new Congress convenes in January.
Our Washington bureau chief John Dimsdale’s following the story today. Hi John.
JOHN DIMSDALE: Hello, Kai.
RYSSDAL: All right, so what happened that the White House had this change of heart?
DIMSDALE: Well, you know, I think they’re really worried about who’s going to get the blame if one or more of these companies goes under. Especially since they’ve already poured hundreds of millions of dollars into the banks. The car problems are really cascading out into the already shaky economy. You know, GM announced today that they’re going to temporarily shut down 20 or more factories, just because they have so many unsold cars on their lots. And some dealers say that their banks have begun pulling in their loans or mortages. Lenders, after seeing what the Senate did yesterday, began calling dealers and parts makers, saying, “Show me the money. Where are you going to get the resources to pay next month’s loan payment?” So I think the White House is kind of concerned.
RYSSDAL: Well, let’s check on that money. How much is left in the TARP that the government can spend?
DIMSDALE: Well, Congress gave Treasury half of the $700 billion, telling the Secretary, “You’re going to have to come back to us for the second $350 billion.” So far, Treasury has obligated $335 billion. Most of that is already out the door. And that leaves, very conveniently, $15 billion — which is very close to the amount that GM and Chrysler say they need just to get them through the end of January.
RYSSDAL: John, very quickly, any talk at all of Treasury going back for that extra $350 billion?
DIMSDALE: They might do that. But Congress doesn’t seem in the mood to grant Treasury more money. You know, if they ask for this, it’s going to open up the Administration to loads of bipartisan criticism of the way that the money’s been spent so far.
RYSSDAL: Yeah. All right. Back to cars. Any other options for Detroit beyond the TARP?
DIMSDALE: Well, there’s some talk that the Federal Reserve could cover loans for the industry. And the Fed hasn’t ruled it out but it really does get way beyond the Fed’s normal jurisdiction, which is just overseeing financial institutions. But hey, Kai, there’s something we can all do, you know.
Michigan’s governor, Jennifer Granholm, says she’s buying automotive stock for her kids for Christmas.
JENNIFER GRANHOLM: The price is right. It’s a great way to support the home team. If you can get credit, buy an American car now.
RYSSDAL: The price is right. I love that one. What happens now, though, John? Congress is gone. Where do we go?
DIMSDALE: Well, that means it’s up to the executive branch. Reporters have been told that there will be no announcements until next week and that’s despite some real pressure from Congress and governors who say that without the certainty of a rescue, layoffs and these other repercussions will continue. They’re hoping that a rescue loan will be announced this weekend.
RYSSDAL: All right, it’s going to be an interesting end of the year. John Dimsdale in Washington. Thank you, John.
DIMSDALE: Thanks, Kai.
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