A spokesman for a Washington-based free market think tank says if Congress wants to help the auto industry, it should repeal the fuel economy standards it enacted last year rather than provide the automakers a government handout.
Ford, GM, and Chrysler are asking the federal government for $25 billion of the Wall Street bailout for emergency loans. A Senate vote on an auto industry bailout is expected as early as tomorrow. In this lame duck session, Democrats will need at least a dozen Republican votes in the Senate to prevent the measure from being blocked. Sam Kazman, general counsel for the Competitive Enterprise Institute (CEI), contends favoring domestic automakers will be a waste of taxpayer money. "These companies generally produce what, I think, are good-to-excellent products. They have half the market in the U.S., but the fact is that GM, Ford, and Chrysler have been losing billions of dollars for years; and the real question is if you start throwing federal money at it now, why is there any reason to think that the underlying problems that these companies have are going to be solved?" he asks. "In fact, what that money may well do is just insulating them from trying to get at some real solutions." Congress, according to Kazman, could provide immediate assistance to the auto industry and not even spend a penny if it eliminated the federal fuel economy standards, which have been estimated to carry with them more than $100 billion in research and development costs over the next few years.
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