Carmakers Spend Millions to Win Billions from Congress

Daily News Article   —   Posted on November 17, 2008

(by Jennifer Haberkorn, WashingtonTimes.com) – The country’s “Big Three” automakers have paid millions of dollars in
lobbying bills and campaign contributions this year, hoping to curry
favor with the federal government’s executive branch and with lawmakers
they hope will grant them federal assistance.

Combined, Ford Motor Co., General Motors Corp. and Chrysler LLC
spent more than $20 million lobbying in the first three quarters of the
year and donated $1.3 million to federal candidates in the 2008
election cycle, according to Senate lobbying-disclosure reports and
donation data from the Center for Responsive Politics, a Washington
watchdog group.

Senate Majority Leader Harry Reid, Nevada Democrat, said late last
week that the Senate will return Monday to begin debate on whether
federal funds should go to the automakers, who say they are running out
of cash as auto sales plunge. Senate Democrats intended to introduce
legislation attaching an auto bailout to a House-passed bill extending
unemployment benefits.

The House Financial Services Committee is scheduled to host a hearing with automakers on Wednesday.

The companies are seeking $25 billion in emergency loans, though
supporters have offered to reduce the amount to win approval in
Congress.

A White House alternative would allow the automobile companies to
take $25 billion in loans previously approved to develop fuel-efficient
vehicles and use the money for more pressing needs. A White House
spokeswoman told the Associated Press on Friday it opposes a plan by
congressional Democrats to include the auto assistance in the $700
billion bailout that Congress already approved to stem the credit
crisis.

While $1.3 million in political donations is not significant
compared with the dollars spent by some other industries, the
automotive industry is one of the nation’s largest lobbying groups in
terms of budget.

“Just because an industry doesn’t make a lot of contributions
doesn’t mean it’s not influential,” said Massie Ritsch, spokesman for
the CRP. “Obviously, the car manufacturers employ a lot of people, and
people elect politicians … . There’s also potentially a significant
ripple effect if these companies fail, and politicians are aware of
that.”

GM has spent about $10 million on lobbying through the first three
quarters of the year, while Ford has spent nearly $6 million and
Chrysler nearly $5 million.

On Friday, GM said its lobbying efforts are proportional to the
issues that impact its business, citing legislation such as the energy
bill, passed last year, that raised fuel-economy standards.

“Lobbying and political action committee contributions are
traditional and transparent means that industries, corporations and
special interests have used to have their collective voices heard in
Washington,” said Greg Martin, director of policy and Washington
communications at GM. “Our political contributions also are directed to
those who support a strong, competitive manufacturing base.”

Ford and Chrysler did not return calls for comment.

Not surprisingly, many members of the congressional delegation from
Michigan – where all three companies are based – have received generous
donations from the political action committees set up by the companies.

Rep. Joe Knollenberg, Michigan Republican, has collected $30,000 in
donations from the three companies’ PACs in this election cycle. He has
championed the auto bailout as “building a partnership” that would help
create jobs in Michigan.

Rep. John D. Dingell, Michigan Democrat and chairman of the House
Energy and Commerce Committee, has collected $28,500. He said last week
he was looking forward to helping the U.S. auto companies “re-emerge as
a global, competitive leader in fuel efficiency and in new,
path-breaking energy-efficient technologies that protect our
environment.”

The automakers say the state of the struggling U.S. economy has
dramatically curbed auto sales, sending the companies into financial
trouble. If the government does not offer assistance, it risks seeing
the companies fall into bankruptcy, prompting thousands of job losses.

Historically, the automakers’ political action committees and
employee donations – companies cannot contribute directly to candidates
– have favored Republicans, the party now resisting the bailout.

About two-thirds of the industry’s donations to members of Congress
have gone to Republicans in previous election cycles. But this year, as
the political winds distinctly favored Democrats, the industry has
split donations about 50-50, according to figures from the CRP.

The companies show in quarterly disclosure reports that they’ve
lobbied the House, Senate and the Bush administration on a wide range
of issues, including passenger safety; asbestos; loans; energy and
water regulations; and property rights.

Copyright 2008 News World Communications, Inc.  Reprinted
with permission of the Washington Times.  This reprint does not
constitute or imply any endorsement or sponsorship of any product,
service, company or organization.  Visit the website at www.washingtontimes.com
.

Questions

1. Define the term “lobbying.”

2. How much have the Big Three – Ford, General Motors and Chrysler – spent lobbying Congress so far this year?

3. How much money have the Big Three donated overall to federal candidates in the 2008 elections?

4. a) How does the bailout proposal for automakers made by House Democrats differ from the bailout proposed by the White House?
b) How do Senate Democrats propose to help automakers?

5. a) How much money have Michigan Congressmen Joe Knollenberg (Republican) and John Dingell (Democrat) received from the Big Three this election cycle?
b) How does each Congressman view a government bailout of the Big Three?

6. a) Do you think the government should bail out the Big Three? Explain your answer.
b) Ask a parent the same question.

7. CHALLENGE: Read the commentary “Say no to the auto bailout” at cnn.com.
a) Do you think Mr. Mitchell makes a good case for why the auto industry should not be bailed out? Explain your answer.
b) Do an internet search for a commentary supporting the auto industry bailout. Do you think that commentator makes a good case for why the auto industry should be bailed out? Explain your answer.

 


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