This morning Bush announced that he would authorize a $17.4 billion in loans to the automakers — $13.4 billion out of the existing TARP funds, and $4 billion contingent on Congress releasing the second half of the remaining $350 billion.
The question as to whether Bush was going to demand something odious of the UAW in exchange for the loans was answered. In short, not really — the demand made by plantation caucus senators that the UAW reduce their hourly wages by 2009 is now a non-binding "target," and the loan is not contingent upon their acceptance.
So Harry Reid actually won his first game of chicken with the White House that I can recall. Bush blinked.
Steve Liesman, reporting on CNBC this morning explained what the mechanism is for the release of the second half of the TARP funds:
- The President must submit a written report to Congress detailing how the money will be used.
- This triggers a 15 day period in which Congress can veto the request by a joint resolution. If they don’t, Bush gets the money.
- If Congress disapproves the request within 15 days, Bush can veto the disapproval.
- If Bush vetos the disapproval, Congress must re-diapprove within a 15 day time period, or Bush gets the money.
Henry Paulson said today that he is going to begin talking with Congress about getting his hands on the rest of the money, but this does not constitute the formal request that will trigger the 15 day clock.
Liesman noted that Bush only has 32 days in which to spend the money, which could be one reason why lawmakers might approve the request, since having the funds available would provide "confidence" to the market that there was money available if any problems occurred.
Anyone who would be comforted by the gang that couldn’t shoot straight being anywhere near that pile of cash deserves what they get.