Obama v. Congress: The Auto Industry Bailout

Perhaps the first real test of Barack Obama's political capital will be how aggressively he pushes to give the auto industry more government help.

On CNBC this morning, Rep. Adam Smith (D-WA) said that Congress shouldn't bail out companies that are poorly run, and said he would prefer that they go into bankruptcy and using the "bailout" money to retrain the workers. 

His opinion probably reflects the opinions of many centrist Democrats.  On the stump, Obama essentially vowed to save the auto industry come hell or Hondas.

Of course, the way for Congress to avoid a confrontation with President Obama is to deal with the auto industry before Obama becomes president.

The emerging Republican view is similar to that of centrist Ds.  Mitt Romney, speaking to Fortune, encapsulates it: "Before the government issues loans to the auto industry, as has been authorized by Congress, it should insist on seeing credible and independent strategies that will return the companies to long-term sustainability. Government should not finance ongoing losses and declining market shares