Big 3 Words for Senator Corker & Friends: “Not Dead Yet!”

Yesterday, following the rude demise in the Senate of a legislative response, my hope for the Big 3 and, by extension, the economy, included most prominently the use of Troubled Asset Relief Program (TARP) funds. That possibility seems to have become a likelihood as Treasury spokeswoman Brookly McLaughlin said today, “Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry.”

In a display of dead-on insight, United Auto Workers (UAW) President Ron Gettelfinger accused GOP senators who blocked emergency loans of trying to “pierce the heart” of organized labor, and professed belief that the UAW will not have to renegotiate its contract terms any further to receive TARP funding. You’ll remember from yesterday’s entry here, the primarily Republican gang in the Senate had been seeking, among other concessions, drastic wage cuts within the next year. As Senator Bob Corker (R-TN) put it “We were three words away from agreement” with the UAW, meaning that all that remained was for the union to choose a “date certain” within 2009 for their initiation of large wage concessions, rumored to have been as much as 40%. Well, the UAW did give him his three words, “No thanks, windbag!” From there, it’s been rumored, the mood soured quickly.

Kudos for . . . Cheney? I have to shake my head furiously when I try to remember the last time I quoted Dick Cheney positively, or even dared to write his name without a priest and rabbi praying nearby. But yesterday, the inimitable Dick visited the recalcitrant Republican Senators to drum up support for the auto package. According to reports, in no uncertain terms, he scolded them and warned if they failed to pass the legislation, “it’s Herbert Hoover time again.” With Cheney, as always, being presently priest and rabbi free here at my keyboard, it’s hard to divine his true purpose. My guess, though, is that he realizes the rapidly descending path the economy is already on, and, moreover, its utter fragility due to the lock up of credit. Also though, as one who may have his eye on “legacy,” Cheney likely remembers Sir Winston Churchill’s adage, “History will be kind to me for I intend to write it.” Simply put, the VP is perhaps posturing in order to shift blame to Senate Republicans.

But let’s put the better face on it: Cheney understands what’s at stake here.* And that is another reason that TARP funds will likely be soon released for the Big 3. Despite Cheney’s apparently diminished role of late, he is still a force of nature, and when he speaks to the White House and to Hank Paulson at Treasury, he retains authority that is still very much alive, although he may no longer be able with a glance to frighten senior executive branch officials into their closets for days on end.

Tarp, Schmarp. Problems remain, however, even should Treasury proceed with releasing TARP funds. TARP funds, after Congress authorized the first $350 Billion, are down to the neighborhood of $20 Billion, and $14-$16 Billion for the Big 3 would leave little left to cover other contingencies. The Treasury would then have to ask Congress for release of the other $350 Billion, and there, of course, is the rub. The same group of Republican Senators would readily – happily – stand in the way of releasing the additional $350 Billion, particularly if Treasury had previously “gone over their heads” and used its funds for the Big 3. In addition, other Senators, including Senator Chris Dodd (D-CT), who voted to bring the Big 3 loan package to the floor for a final vote yesterday, oppose releasing the additional $350 Billion of TARP funds without intense Congressional scrutiny beforehand. In another irony, like my praise for Dick Cheney, I now find myself in the position of arguing for a quick and bold use of executive power by Treasury rather than for the Congress to adamantly assert its own weakened powers . . .

In any event, for now, Senators Shelby and Corker and all the rest,** the Big 3, the UAW, and even your old pal Dick Cheney have another three words for you:

Let’s face it though, like the ending of the clip below from Monty Python and the Holy Grail , Senator Shelby and his ilk from both parties may yet find a way to prevail, perhaps by threatening the additional TARP funds. . . . they are after all, “the Knights who say Ki!” But for now . . .

* Go here for an exceptional (Adobe FlashPlayer 10) graphic interactive map of the size in jobs of the auto U.S. industry (not merely the Big 3). It includes state-by-state jobs in new-car dealerships, parts and wholesale, and assembly.

** Including, unfortunately, Democratic Senators Baucus (D-MT), Lincoln (D-AR), and, surprisingly, Tester (D-MY)). Note that Senator Reid (D-NV), an ardent supporter of the Big 3, also voted against the procedural vote to bring the loan package to the floor, but it was for procedural reasons. Also note, for sundry reasons, only 87 Senators voted yesterday.

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