In American politics, a “lame duck” is any politician leaving office as a successor awaits. The term is typically applied to presidents who will be leaving the White House but are awaiting the inauguration date of January 20th to turn power over to their successor. Like a duck wounded by a hunter, this president lies powerless as those with power approach.
This week, the Congress begins a lame duck session as at least 56 current members will be leaving as of January 6th, 2009. But with S.O.S. calls coming daily from the struggling U.S. auto industry, much is being asked from this lame duck Congress.
Arguing that hundreds of thousands of American manufacturing jobs could be put at risk with no action, Democratic congressional leaders have set the goal of getting at least $25 billion of the $700 billion bailout package set aside for the Big 3 of Detroit. These leaders say the auto industry can not wait until January 20th for action.
The Bush Administration has not rejected the bailout proposal, but has hinted that he would favor using money that had been set aside for the 2007 Energy Bill for any bailout of the auto industry.
Students of government should keep their eyes open for some interesting lame duck legislative intrigue in the coming days with classic legislative lingo resting at the center of this D.C. drama.
Filibuster: A filibuster is a weapon used in the Senate by the minority side (currently Republicans) to permanently delay a bill with permanent debate. It can successfully kill a bill unless 60 Senators vote to limit debate with “cloture.”
Unlike the next Congress, this lame duck Congress has a very narrowly divided Senate where Republicans might very well resort to using endless filibusters to prevent their chamber from passing any bailout.
VETO: If a bailout bill manages to survive a Senate filibuster, President Bush might decide to kill the bill with his Veto power. To pass a bill that has been vetoed, two-thirds of the House and the Senate must then vote to approve the bill. This is not too likely with the narrow Democratic majorities in the 110th Congress.
Pocket Veto: If Congress passes a bill with less than 10 days left in its session, President Bush can simply choose not to sign this legislation into law. In this case, the law is automatically rejected with this “pocket veto.”
111th Congress: The field changes on January 6th with the swearing in of the new 11th Congress. With a more powerful Democratic majority in both chambers, the 111th Congress could turn up the heat on President Bush before his departure on January 20th.
Inauguration: On January 20th, President Obama comes to town with a whole lot of power to replace the lame duck president. He will certainly be more willing to work with the Democratic Congress, but many question what the U.S. auto industry will look like after weeks of lame ducks.
(CBS2School)
VIDEO: The Lame Duck Congress
8 comments:
I really don't understand why the government must bail out struggling companies, who are struggling because of their own decisions to not shift to newer production methods, and insisting on creating large (with higher profit margins) S.U.V.'s and trucks. Just as many airline industries have successfully survived Chapter 11 bankruptcy, it hardly seems likely that all three manufacturers will go entirely bankrupt, laying off all of their employees at once.
Lets not delude ourselves by thinking that if one company dips into bankruptcy to restructure, 3 million jobs will be lost instantly. Let the free market system work.
Instead of giving a blank check to the auto industry and repeat the mistakes that the bailout has produced, conditions regarding corporate accountability should be set in. A truly free market system is not possible in modern America and due to the loosening of regulations, the financial crisis occurred. Letting this issue smooth over is not the right direction to go. It's time to bring the needed balance that was needed in regulations that the government decided to overlook in order to stabilize the economy again.
There's no denying that there has been some severe mismanagement of the American auto industry over the past couple of years, but we shouldn't put all the auto-workers jobs in jeopardy because of it. Its hard for the American auto industry to compete with foreign countries like Korea that can pay there workers like 10 cents with the current trade, and tariff laws we've got.
We can't let one of America's last manufacturing industries that hasn't been out-sourced to fail. We have to make them re-manage to make more appealing smaller cars and make sure the bail out money that we give them isn't wasted. The 25 billion the auto industry is asking for is nothing compared to the 700 billion we used to bail out wall street, and the auto industry actually produces something for Americans
I agree with some of what Jeff said, but then why did President Bush and republicans agree to bailout Wall Street? Let the free market system work there too. I agree that all those jobs won't be laid off immediately, but once they are, they will probably never be picked up with the big 3 again. In order to save money and be competitive, many of these companies are seeking to move aspects of manufacturing abroad. This will let them compete with cheaper Japanese cars in todays market. This will mean American jobs will be lost forever, not just a while, if the government does not help.
I think that the companies do need to restructure dramatically, and getting money from Congress can help do that. Congress has the power to impose environmental regulations, like mpg minimums and emissions (which would help the energy bill the money may be going to instead), safety regulations, and others.
To comment on airline travel, I believe it is needed and companies survived because there is no public transportation to get you from a meeting in New York to Chicago in 4 hours, but there is the Metra to get you from Aurora to down town Chicago.
I just saw the video lowlights of two hours of Senate praise for convicted felon Ted Stevens. Members from both sides of the aisle stood and gave the 85-year-old "Bridge To Nowhere" Uncle Ted a standing ovaition -- which by the way is against Senate rules.
Meanwhile, millions in the working in the auto industry have their jobs in peril, and unemployment is at a 24-year high and the Dow at a 5-year low.
Maybe this is why, as an institution, people hold Congress in such low regard.
Here's why Detroit is in trouble:
1. They made far too many concessions to the UAW and let them practically run the company
2. They build unreliable pieces of junk throughout the 70s and 80s, alienating longtime buyers and blowing any chance they had of winning over Generation X and, by extension, us Millenials.
3. They adhere doggedly to Alfred P. Sloan's model of having a line of succession where you gradually move a buyer to increasingly upscale products (Ex: start them out in a Chevy, then move to an Oldsmobile, then Buick, then Cadillac). This model has been obsolete for decades.
4. Although they have put out some pretty good stuff since 1990, they have found nothing to distinguish themselves from foreign automakers.
5. They kept buying more and more companies in the belief they had to employ one-third of the world workforce (slight hyperbole here). The companies got too big to handle.
There is absolutely no reason to pull the Big Three out of the graves they blindly dug for themselves decades ago. If the Big Three go under, millions of jobs will be lost, but the natural cycles of the job market will take care of these losses in the long run.
So what should Detroit do?
1. DOWNSIZE, DOWNSIZE, DOWNSIZE! For GM, this means getting rid of every brand except Chevy/Chevy trucks, Cadillac, and Buick (and this last only because Buicks sell well in China). For Ford, this means getting rid of all the extraneous brands, especially Mercury, and just producing under the Ford nameplate. For Chrysler, this means turning into a small manufacturer called Jeep. Everything else must go.
2. Reduce concessions to Unions. Detroit's cost overheads resulting from union concessions are enormous. The Japanese have few or no union benefits and thus are able to sell at lower prices because they have lower production costs. And I haven't heard any complaints from employees in those companies!
3. Completely restructure the management system. No need to elaborate here, except that this will include firing a lot of them.
4. File for Chapter 11. This will give them protection to do the above.
This is only the beginning of what the Big Three must do. Our spending is out of control as it is. We don't need to bail out Detroit
-Garrett Bergquist
As to Garrett's comments,
"Reduce concessions to Unions. Detroit's cost overheads resulting from union concessions are enormous. The Japanese have few or no union benefits and thus are able to sell at lower prices because they have lower production costs. And I haven't heard any complaints from employees in those companies!"
-- Point is well-made, except that Japan and British competing car makers have workers covered by a state health care plan. We already have 47 million not covered by health care in this country, so GM is in a serious financial pinch because of negotiated health benefits to employees and retirees.
At the same time, to reduce concessions to unions, by that do you mean you are willing to have millions more Americans without medical coverage?
"File for Chapter 11. This will give them protection to do the above."
The THEM would be the Companies themselves. I look at the US as the workers who would lose jobs/medical benefits. This is also not like the airline industry, where Chapter 11 reorganization can work (United). Would you buy a car from a bankrupt auto maker? With questions over whether your warranty would be honored, I don't think so.
Anyways, Garrett it is always good to continue the debate. Happy Holidays!
If the Big Three file for Chapter 11 and reduce union benefits, all or most of the workers will lose some benefits, but not many will lose all of their benefits. If the Big Three do not file for Chapter 11 and have to file for Chapter 7 in three months (liquidation, i.e. the end of the Big Three), that means all of the workers will lose most or all of their benefits. So do we reduce workers' benefits now but ensure they will have at least some benefits for years to come (or at least stand a chance of having them years from now), as with Chapter 11, or do we keep the benefits intact only to see them vanish without a trace in a couple of months? Do we want to hurt some people now or lots of people later?
As for Mr. Wolak's assertion that Chapter 11 would give someone a disincentive to buy a car, that is exactly what Detroit is thinking right now. However, if the auto industry goes Chapter 7 in a couple months, you won't be able to get any maintenance on your car. Also, Chapter 11 could be a public relations coup if it is spun the right way. Everyone outside Detroit wants to see some Chapter 11 filings. The first company to do so can claim they are a more responsible company than the other two. This will create a positive externality by forcing the other two to file Chapter 11 to avoid turning the market for domestically produced autos completely over to the one company that does file Chapter 11. Who benefits? American auto consumers and workers at these companies, because now their companies stand a chance of survival. Sure, the warranties won't be honored, but at least with Chapter 11 there is still a chance you can get maintenance on your car, unlike right now, where Detroit is basically headed for oblivion.
As we always say in my family, "There's always a tradeoff."
It's good to see the blog again, Mr. Wolak!
-Garrett Bergquist
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