Press Availability with Speaker of the House Nancy Pelosi (D-CA) - Big Three Automakers Recovery Plans
Interview
SPEAKER PELOSI: Good afternoon.
I've just concluded a call with the House Democratic leadership. Among the issues discussed was the auto industry's request for assistance. As I have said before, the auto industry must show us a plan before Congress can consider giving them money. Senator Reid and I gave the industry 10 days to produce a plan for Congress, the administration, the relevant -- for the administration and relevant experts to review.
Right now -- also, we received -- we received, I think, Chrysler and Ford --
STAFF: GM and Ford.
SPEAKER PELOSI: Excuse me?
STAFF: GM.
SPEAKER PELOSI: GM and Ford. I have not received them in hand, obviously, but my understanding is that they have made impact on the Capitol. And they'll be reviewed by the Federal Reserve, by the General Accounting Office, pertinent executive branch agencies that, again, will be relevant to this.
Thursday and Friday we will have congressional hearings to review the plan. And we will then make some kind of a decision after all of this review as to whether Congress will take legislative action to assist the companies, to implement their restructuring plans.
I hasten to add that whether we do or not, the administration has full authority under the TARP law to make a loan to the industry, some kind of a bridge loan. They can put any conditions on it that they wish, that are appropriate, to see them over should Congress not take legislative action.
It is my hope that we would. We have to notify members of a special session, a lame-duck session, again, if we do. So we're anxiously awaiting the -- a review of this.
There's certain standards that we want to see. We want to see a commitment to the future. We want to see a restructuring of the approach, that they have a new business model, a new business plan.
There has to be compensation reform. It's ridiculous to ask the taxpayers to fund the shortfall of companies that are paying millions of dollars to their executives while the companies are losing billions of dollars.
And so some of the standards that are -- that are self-evident in the Frank legislation; similar legislation in the Senate. And so, again, the industry must show how it will innovate and prepare to take the country -- companies into the 21st century. It's about viability of the industry. It's about accountability to the taxpayer. And it's about innovation for the future.
So as soon as we know more, we'll keep in touch with you on that subject.
Q Were you pleased with what you saw from --
SPEAKER PELOSI: Well, now, I haven't -- they've just landed, and they -- we're waiting for an analysis of them. And I'm -- I have some -- I have a couple of calls to return from the industry for their short form of what might be in them. But I don't come before you as one who has seen the plans yet. I'm just saying the plans come today. The GEO -- GAO, the Federal Reserve, appropriate agencies of the federal government, the Financial Services Committee in the House, the Banking Committee in the Senate will have hearings. They get a very appropriate review, with speed, not haste; with deliberation; and with an -- with a desire to accommodate.
At the end of March I -- it is my hope, and what we are working for is to have an auto industry in our country that is viable, that is forward-looking, and that is worthy of the support that the taxpayer will invest in it.
Q Madame Speaker, what, in your view, are the consequences if Congress does not act on this and the administration does not make the money available from the TARP?
SPEAKER PELOSI: (Inaudible.)
Q And if I can also ask a procedural question: Would you go before or after the Senate?
SPEAKER PELOSI: Well, first of all, first question, I believe that an intervention will happen, either legislatively or from the administration. I think it's pretty clear that bankruptcy is not an option. And let's talk about why. It takes too long. What bankruptcy achieves in a year we can do in a matter of weeks. That's why the short-term TARP loans is an appropriate way to go.
Everybody is disadvantaged by bankruptcy, including our economy. So that's not an option. So either their plan will be one that we will act upon or we will say this is how we want you to restructure and that will be the legislation. It just depends on how close they are to the requirements that we put -- set forth when we said come back in 10 days.
And I repeat, the administration has the latitude and the authority in the TARP legislation to make a bridge loan to the companies, Big Three. It could be until March. It could be something that is parceled out over time to see performance. As I say, they have a great deal of latitude. But I don't think anyone wants to see bankruptcy.
Q And before the Senate? Will you go before the Senate?
SPEAKER PELOSI: Oh. I really haven't even had that discussion. But since it is an appropriation, it would be appropriately to begin -- appropriate to begin in the house of Representatives.
STAFF: Last question.
Q Have you had any discussions with the administration about when they're going to -- (off mike)? Isn't this all relevant to that discussion?
SPEAKER PELOSI: Well, yesterday I spoke with the president about the fact that while he and I had glorious Thanksgivings, many people in our country did not; that there is an emergency food need in our country, a need for us to provide assistance; and that I hope that he would reconsider supporting a stimulus package that provided some of that emergency food assistance, some of the FMAP, the Medicare -- Medicaid assistance that is being asked for by the governors. And of course, I always am hopeful about infrastructure, but that may have to wait until January.
So the overall state of our economy was the subject of the conversation, how it impacted families in America, families who never went to a soup kitchen before. Usually it's single men; now it's families showing up. So that was one point, the near-term stimulus. Second, long-term stimulus, but we'll have to, I think, work on that ourselves.
The other question was the -- what we'll do about autos. And we had a conversation about that. And I'll be eager to see what announcements there are about that.
And then the third subject -- stimulus, one or two; auto; and then, third, your question, the TARP -- I reminded the president -- I don't think he needed a reminder -- that any call for additional TARP funding would trigger a three-day call of the Congress to come back. So I was just talking about the practicalities, the logistics of such a move, that we would really like to know as soon as possible if they're going to ask for that funding, so that we -- in the interest of getting members back here in time to deal with it in the three-day window that the law allows for. So -- but I had no indication from him that that was happening or that that decision was made. But he does know that I'm looking forward to hearing from him on that score.
Q (Off mike) -- you want to take money from the TARP to deal with the auto industry.
SPEAKER PELOSI: Right.
Q (Off mike) -- be stocking up the food banks and the medical -- well, doesn't it make sense for him to make a request now? Now there's lots --
SPEAKER PELOSI: Well, you'd have to ask him, because this has to be initiated by the administration. They have to ask for that first.
Q So he had no response as to --
SPEAKER PELOSI: Well, we had a reasonable conversation about it. I think everybody understands what is at play, what the opportunities are, and that we'll need to know if the president sees the need to do that. We'd like to know this as --
Q (Off mike) -- or what did he say?
SPEAKER PELOSI: Sir, I'll get back to you.
Q Madame Speaker? Madame Speaker?
SPEAKER PELOSI: Anyway, anyway, it was really sad to see over Thanksgiving that we were able to rescue the banks but now we have to rescue the food banks because the shelves are bare. And this is a serious concern for many of us in Congress because it's a serious concern to the American people.
I hope you had a happy Thanksgiving. Thank you all very much.
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