Rubio criticizes $85 billion auto bailout
Republican presidential candidate Marco Rubio said Friday that the $85 billion auto bailout was not the "right way" to handle the troubled sector in 2008 and 2009.
At an appearance in Manchester, New Hampshire, the Florida senator said the rescue of General Motors Co. and then Chrysler Group LLC was not the right position for the federal government to take.
"I don't think that was the right way to handle it, but certainly our auto industry is important. Again, it was a problematic approach that the federal government took to doing it. But at the end of the day our industry has to be globally competitive. One of the things that makes them globally competitive ... is having a workforce that can do the work and also having tax policies, regulatory policies that ensures that America continues to be a place where all industries thrive including the auto industry."
Rubio made comments in 2009 opposing the auto bailout. Republicans have long sought to appeal to autoworkers by suggesting that Democratic policies on fuel efficiency standards or other regulations could hurt the sector.
Democrats quickly posted video of Rubio's comments. It's not clear how big an issue the auto bailout might be in the 2016 race. Democratic presidential candidate Hillary Clinton was a strong supporter of the auto bailout.
President Barack Obama in 2012 made Mitt Romney's opposition to the auto bailout a key part of his re-election win, especially in battleground states like Ohio, Wisconsin, Michigan and Pennsylvania. Democrats seized on Michigan senatorial candidate Terri Lynn Land's opposition to the auto bailout as part of the campaign to defeat her.
Former Republican Gov. Jeb Bush of Florida also opposed the auto bailout — even the efforts his brother President George W. Bush launched with $25 billion in emergency funding in the final weeks of his presidency.
"It was a government-induced bankruptcy that allows now, for example, tax loss carries forward that never, under normal bankruptcies, would exist; it allows for General Motors now not to pay taxes based on profits that otherwise they would have to be paying taxes on. That is the form of capitalism when the government intervenes in a very muscular kind of way. And I don't believe that that is appropriate," Bush said.
Others sought to avoid taking a position. New Jersey Gov. Chris Christie in 2012 told CNN he hadn't thought much about it.
"I've got to tell you the truth, I didn't spend a lot of time thinking about it because what I was doing at the time," Christie said. "I actually try to give things more thought than just three or four seconds before I give you an opinion."
The U.S. government lost $9.26 billion on the auto industry rescue, the Treasury said in December.
In its report, the U.S. Treasury Department said it recovered $70.43 billion of the $79.69 billion it gave to General Motors Corp., Chrysler LLC and auto lending arms Ally Financial Inc. and Chrysler Financial. The government was repaid through a combination of stock sales, partial loan repayments, dividends and interest payments.
Under government accounting rules, the U.S. Treasury actually lost $16.56 billion on paper on the auto bailout. As tallied under those rules, taxpayers lost more because interest and dividends paid by borrowers — in this case, the automakers and finance companies — aren't applied toward the principal owed.
The books are closed on the program because the Treasury, on Dec. 19, sold its final 11.4 percent stake in Ally, the Detroit-based auto lender and bank-holding company formerly known as GMAC. The bailouts began in December 2008 under President Bush with $25 billion in aid to GM, Chrysler and their lending arms. Obama added about $55 billion to the total — and $5 billion for a separate auto supplier support program.
In 2012, Bush defended his decision to save the automakers.
"I'd do it again," Bush told thousands of the nation's auto dealers, explaining approving a $700 billion bailout fund used to rescue banks, insurers and automakers. "I didn't want there to be 21 percent unemployment."
Bush said he believes in the free market and under normal conditions, automakers and other businesses should have been allowed to fail. "If you make a bad decision, you ought to pay," Bush said. "Sometimes, circumstances get in the way of philosophy."