As long as Mitt Romney publicly claims credit for the auto industry’s recovery, he’s going to put his fellow Republicans on Capitol Hill in an awkward position. Nearly all of them have attacked the Obama administration’s bailout in exceptionally harsh terms, despite the fact that the administration’s actions are widely understood to have saved the industry.
In the Capitol on Tuesday, two Senate Republicans struggled to respond.“Romney said that he was responsible for the auto bailout?” asked Sen. John McCain (R-AZ) in disbelief, unaware that Romney had told a local affiliate in Ohio he should be credited for having saved the industry. “I’d have to look at the context of his remarks. I know that if the auto companies had gone into bankruptcy like thousands of small businesses had to do across America, they could’ve emerged without the sweetheart deal for the unions like was orchestrated by the Obama administration.”
Scrape away the inconvenient history, and there’s a way for McCain and Romney to claim they’re on the same page here. Romney’s fond of noting that he wanted the car companies to undergo a managed bankruptcy in 2009, and since that’s a component of what the government ultimately did, all credit should go to him.
At the time, though, the government was the only lender positioned to step in, which meant it managed the bankruptcy, provided financing, and took equity stakes in Chrysler and GM. Private investors wouldn’t or couldn’t step up.
Sen. Lindsey Graham (R-SC), who declared relatively early in the primary that Romney would become the nominee, tried to finesse this.
“I think the idea of restructuring … look what happened to save the companies in question,” he said. “Franchises were closed, efficiency was brought to the table. I think that’s what Governor Romney was talking about in bankruptcy. That if you go into bankruptcy, you reorganize the company, you shed excess cost, you get leaner and you get more affordable. So in that regard it makes perfect sense that the model he was proposing is exactly what they did. What did they Obama administration do? They closed franchises. There was a big pushback up here. That made the companies more efficient.”
But even if you assume Romney would have backed using government dollars to backstop the industry, doesn’t that still leave him on the wrong side of most Republicans?
“Ford made it without any money,” Graham said. “My problem with the government — I was all for stabilizing banks because we all need banks. I’m not going to stabilize every industry through government dollars because it could effect a region electorally or unemployment numbers. The banking system would have brought the whole economy. When they started applying these funds to the car companies they lost me. Because we’ve got car companies in South Carolina got no federal dollars and they’re doing fine. They received no federal funding and they’re doing very good.”