House conservatives, in a letter to President George W. Bush, objected Wednesday to a White House plan to transfer a portion of the $700 billion financial rescue plan to save the Big Three U.S. automakers.
The letter, signed by 22 GOP Members including Republican Study Committee Chairman Jeb Hensarling (Texas) and incoming RSC Chairman Tom Price (Ga.), said using part of the bailout funds would violate Congressional intent.
The lawmakers warned of dire, long-term consequences for the economy if the bailout money is used to help the automakers. They suggested that the companies instead restabilize their assets through more traditional means, such as Chapter 11 bankruptcy.
“Congress never voted for a federal bailout of the automobile industry, and the only way for [Troubled Asset Relief Program] funds to be diverted to domestic automakers is with explicit congressional approval,” the Members wrote. “Tempting as it is to step in with a federal bailout, American taxpayers cannot afford to save every company facing financial peril. Last year’s federal deficit was the highest nominal deficit in U.S. history, and many economists believe this year’s deficit will exceed $1 trillion.”
The letter is the latest in a series of efforts by House Republicans to stop the government from bailing out the American auto industry. Only 32 House Republicans voted with Democrats to pass a $14 billion bailout bill on Wednesday.
The measure later died in the Senate.