By Josh Mitchell Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- As federal officials move swiftly to inject $20 billion into Citigroup Inc. (C) and guarantee the banking firm's assets, General Motors Corp. (GM), Ford Motor Co. (F), Chrysler LLC and their allies are left asking, "What about us?"
"In the district, people feel that this is clearly Congress caring more about people who wear Guccis than people who wear Levi's," said Rep. Thaddeus McCotter, R-Mich. The cash infusion for Citigroup would come from a $700 billion banking rescue fund approved by Congress this fall.
"We're all sitting here going, 'Look, they don't even blink about rushing into save the financial markets all the time,'" said Rep. Candice Miller, R-Mich, accusing the government of "hand-delivering" money to Citigroup. "We feel there is such a double standard."
The swiftness with which officials moved over the weekend to assist Citigroup stands in stark contrast to the government's response to cries from the auto industry, which has spent months lobbying for $25 billion in low-cost "bridge" loans to help the industry weather the economic downturn.
The Bush administration has declined to provide the aid without more legislative action from Congress. And last week, members of Congress balked at passing a $25 billion aid package, instead ordering that the Detroit auto makers' chief executives come back next month with plans for turning around their companies. President-elect Barack Obama, in a news conference earlier Monday, said the auto makers should survive but not receive a blank check from the government.
Administration officials, including Treasury Secretary Henry Paulson, have insisted that their focus remains on shoring up the Wall Street firms that play a systemic role in the economy. Nursing those firms to health, they maintain, would free up lending for all industries and help the broader economy. To that end, the government has spent hundreds of billions of dollars back-stopping Fannie Mae (FNM), Freddie Mac (FRE) and American International Group Inc. (AIG).
"There seems to be some misconception out there that we don't want to help the auto makers," White House spokesman Tony Fratto told reporters Monday. "We do want to help the auto makers." He noted that the White House has pushed legislative action to speed the release of loans from a program to help auto makers develop fuel-efficient cars, but that Democratic leaders have resisted modifying that program.
David Cole, chairman of the Center for Automotive Research, said that as the government rushes to the aid of more and more Wall Street companies, officials may find it increasingly harder to justify withholding aid from Detroit auto makers, who collectively employ about 240,000 Americans.
He emphasized that many people leading the government's financial rescue, such as Treasury Secretary Henry Paulson, have backgrounds in Wall Street and may have a firmer understanding of the role banks play in the economy than that played by industrial firms like auto companies.
University of Maryland economist Peter Morici, who testified before Congress last week on the consequences of bailing out the auto makers, said the government is being too lenient on Wall Street. He said that the continued rescue of banks contributes to a climate that will likely lead to the eventual rescue of Detroit.
"It makes it more likely they're going to get cash from the government and not make the changes they need to," Morici said. "We're going to emerge from all this with poorly run banks and poorly run car companies."
Media representatives of the major auto makers declined comment Monday.
McCotter noted that the government has radically modified its Wall Street rescue plan - scrapping, for example, the original plan to purchase mortgage-related assets - and said it has the authority to help auto makers.
He pointed out that the foreclosure crisis is at the root of the financial markets meltdown, and that the crisis could get worse if one of the auto makers fails.
"People who work for these companies are now going to be staring at layoff notices and staring at house payments they cannot make," and foreclosures will rise even further, McCotter said.
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637; joshua.mitchell@dowjones.com
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(END) Dow Jones Newswires
November 24, 2008 17:07 ET (22:07 GMT)

Publié le 24 novembre 2008 Copyright © 2008 Dowjones