Nancy Pelosi’s Motown Juggling Act
If there was a moment that highlights to what extent the Democratic Party has become captive to its special interests, this might be it. Mrs. Pelosi and Harry Reid have spent this week demanding that Washington stave off a car-maker collapse. What makes this a little weird is that Mrs. Pelosi and Mr. Reid are Washington. If they so desperately want a Detroit bailout they could always, you know, pass one.
Instead, having punted the Detroit question in the past, and having failed to offload it on the Bush administration, Mrs. Pelosi is now stuck dealing with it in the middle of a lame-duck session that is tangled in Colombia trade politics. Detroit’s demands are meanwhile pressing in a postelection environment where Big Labor and greens are presenting their own bills for political services rendered. If you’re wondering why Mrs. Pelosi hasn’t yet decided what will happen when Congress returns, it’s because she hasn’t decided which group to annoy.
Democrats have been trying to shuffle money to Detroit since summer, but their timing has been off. The Michigan delegation’s big push for auto funds coincided with September’s financial crisis. With Washington in a panic, voters howling over $700 billion for banks, and an election in the offing, the leadership decided a Detroit bailout was one hot potato too many.
This decision was made easier by the fact that the Big Three’s balance sheets have made even sympathetic Washington spenders worry about throwing money at a bankruptcy. Democrats decided it would be better to direct the funds in a way that allowed them to later deny fault.
The plan? Make it the Bush administration’s responsibility to give Detroit cash — namely by claiming after the event that the $700 billion rescue package for financial institutions was in fact a rescue package for auto makers. This was attempted with several hilarious “colloquys” — pre-scripted dialogues between members that were quietly inserted into the Congressional Record after the vote, all aimed at rewriting the “intent” of the law. Say, this one, from Oct. 1:
Michigan Sen. Carl Levin: “As Treasury implements this new program, it is clear to me from reading the definition of financial institution that auto financing companies would be among the many financial institutions that would be eligible sellers to the government. Do you agree?”
Connecticut Sen. Chris Dodd: “Yes, for purposes of this act, I agree that financial institution may encompass auto financing companies.”
Fun. Meanwhile, Democrats passed $25 billion in aid for Detroit, though under the careful guise of “green” funds to help it meet new fuel-efficiency standards.
Alas! All for naught! Treasury Secretary Hank Paulson has stubbornly insisted that — whatever the dreamy “intent” of Sen. Levin — the $700 billion is, indeed, earmarked for financial institutions. Even a last-ditch letter-writing campaign by Mrs. Pelosi and the Michigan members this weekend, begging the administration to let them off the hook, wouldn’t budge Mr. Paulson.
If that weren’t enough, the administration has had the temerity to take Democrats at their legislative word, and demand the auto makers actually use that $25 billion in green funds for . . . green retooling. Which, needless to say, isn’t going to help the Big Three CEOs pay their upcoming health-care bills.
And so Mrs. Pelosi has been landed with Detroit, again. The auto makers have staged a brilliant PR campaign, tying their misfortunes to today’s financial mess — never mind those decades of mismanagement. They’ve warned that the ripple effect of a crash could cost three million to four million jobs. Democrats have also undoubtedly been reminded by UAW President Ron Gettelfinger that those come from his union, which recently helped Mrs. Pelosi win an election.
The problem is how not to offend the other groups that just helped her win an election. The White House has intimated that its price for Democratic legislation in a lame-duck session would be the passage of the Colombia trade agreement. Yet Mrs. Pelosi has successfully sat on that deal for months at the demand of the broader union movement, which just spent hundreds of millions to increase Democratic majority.
Meanwhile, another trial balloon — a proposal to loosen the rules governing the $25 billion in green money — sent Mrs. Pelosi’s environmental friends bonkers. They also just spent big helping Democrats, and insist the money go to building clean cars, not digging out Detroit.
Mrs. Pelosi has since tasked Barney Frank with “drafting” a bailout bill. Yet by yesterday, Democrats were backing away from a vote, complaining they weren’t getting help from Republicans. That might work now, though come January, a bigger Democratic majority will no longer have the GOP as an excuse. By the looks of this week, that’s when the real fun begins.