WASHINGTON, DC- At the Senate Banking Committee hearing today examining the state of the domestic automobile industry, U.S. Senator Bob Casey (D-PA) released the following statement:
“This is a jobs issue. Potentially millions of jobs including thousands in Pennsylvania are at stake. As one example, Pennsylvania lost 56 auto dealerships last year and 60 so far this year. The cost of doing nothing is great – not only to Detroit, but to the entire U.S. economy. Moody’s economist Mark Zandi reminded us today that the failure of the U.S. auto industry would be ‘cataclysmic.’
“Providing temporary help to automakers is the right thing to do, but conditions are needed to ensure accountability to taxpayers. I am pleased that when I asked the Big Three CEOs today whether they would agree to a monthly reporting system with compliance benchmarks, they said that they would.
“Today’s hearing provided more information and underscored the stakes of this debate. If you look at the data and listen to the testimony today of the GAO, economists, the automakers and representatives for the workers, there is a very compelling case for quick action.”
In the six-hour hearing there were a number of highlights including:
· The GAO stating that there are tried and true ways to structure a bailout that has worked for taxpayers in the past;
· Economist Mark Zandi stating that while the costs of intervention are high, the cost of doing nothing is “cataclysmic” and in his words “not even in the same universe” as the costs of intervention; and
· Mark Zandi also contending that chapter 11 is not an option, and that 2.5 million jobs could be lost if the companies go bankrupt.
In particular, Senator Casey was pleased that in response to his questions:
· GAO committed to providing additional analysis by next week;
· Automakers agreed to provide GAO the information and access they needed, since GAO lacks statutory authority to secure the information; and
· Automakers stated that they would be willing to accept the monthly reporting and disbursements model Senator Casey has proposed as well as working to make any government investment senior secured debt, thereby protecting taxpayers.
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