The Auto "Compromise?" Car Czar, No Lawsuits, Etc, 07 Money Used

Here's a version of the auto bailout bill that's circulating on the Hill right now.

redline.doc.

It calls for the president will appoint a car czar to administer this, but both sides won't call the czar a czar. He or she will be merely an "adviser."  Any new expenditure greater than $25 million would be subject to this administrator's approval.

One of the biggest concessions that Democrats seem to have wrung out of Detroit is a promise to drop their lawsuits against state governments trying to get them to curtail greenhouse gas emissions.

The terms of any financial assistance under this Act shall prohibit the recipient eligible automobile manufacturer from participating in, pursuing, funding, or supporting in any way, lawsuits any legal challenge (existing or contemplated) challenging to State laws concerning greenhouse gas emission standards)

Republicans say this provision is toxic, as it would essentially allow 16 states to have a veto over the automakers internal manufacturing processes, thereby increasing costs dramatically in the short term.

The Democrats seem to have conceded, in turn, that the bailouts funds  -- $15 billion -- will be redirected from the loan guarantees written into the 2007 energy bill, at least initially.

(1) IN GENERAL.--For the purpose of providing funds to the President's designee in order to make loans for financial assistance under this Act, the Secretary of Energy shall make available to the President's designee funds made available under the provisions of section 129 of division A of the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009, relating to funding for the manufacture of advanced technology vehicles, including State standards established pursuant to the Energy Independence and Security Act of 2007.

Automakers would have seven years to pay back the loans at an interest rate of 5% for five years and then 9% for the remaining two.  Note: the '07 bill contained $25 billion in loan guarantees, but the $7 billion appropriated by Congress to guarantee those loans now secures only about $15 million.

More money would be made available in the spring of 2009, but there is apparently no agreement on this provision just yet.