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| President-elect Barack Obama, with money in hand, looks to pay for his order during a visit to Manny's Deli in Chicago, Friday, Nov. 21, 2008. |
WASHINGTON (AP) -- While President-elect Barack Obama publicly sidelined himself during congressional debate over an auto industry bailout this week, he and his top aides quietly prodded congressional leaders to find a solution to rescue struggling automakers. Obama personally talked to congressional leaders, while his new chief of staff, Rahm Emanuel, and congressional liaison, Phil Schiliro, were routinely dialed into conference calls to discuss the status of negotiations.
"They basically were encouraging us to stay at the table and get something done," said Sen. Debbie Stabenow, D-Mich., one of the senators involved in the talks.
In public as president-elect, Obama has addressed the auto industry crisis only three times - in his postelection news conference, a taped radio address last Saturday and an interview on CBS' "60 Minutes."
"The Obama team has to step up," Sen. Christopher Dodd, the chairman of the Senate banking committee and one of the lead negotiators, said in Hartford, Conn., on Friday. "In the minds of the people, this is the Obama administration. I don't think we can wait until Jan. 20."
Obama and his team have repeatedly asserted that during the transition, President George W. Bush remains the chief executive and that Obama does not want to intrude on his authority. Obama did move closer to making top economic appointments on Friday, news that a Dodd aide said the Connecticut senator welcomed.
But Obama's low-key role in the auto rescue debate also demonstrates the Obama team's reluctance to weigh in on a congressional dispute that was not only partisan but also divided House and Senate Democrats. With a strong chance that a deal could fail, a high-profile role for Obama would have been risky and could have linked him too closely to a congressional stalemate.
Indeed, when John McCain injected himself into congressional negotiations over a bailout for financial institutions last September, it proved to be a political setback for the Republican presidential candidate.
What's more, officials pointed out that a lame-duck session of Congress in the midst of a presidential transition is a tough period to find legislative agreement.
"It's the closing days - it's a very difficult environment to do anything substantial," said Sen. Dick Durbin, D-Ill., a member of the Senate Democratic leadership and a close ally of Obama's.
Durbin said Obama "has continued to make it clear that these are decisions before this president and this Congress."
"He has been following it carefully because it would have an impact on his presidency," he added. "But he is not intervening either directly or indirectly."
Durbin and others did say Emanuel, who has been a member of the Democratic House leadership and is still a member of Congress, was routinely involved and updated on talks. Schiliro, a former top aide to Rep. Henry Waxman, D-Calif., also participated in conference calls. Waxman this week became chairman of the House Energy and Commerce Committee, a powerful panel with significant jurisdiction over the auto industry.
In his first post-election comments about the auto bailout, Obama advanced a proposal to accelerate a $25 billion loan that Congress had authorized for automakers to retool and manufacture more energy-efficient cars.
"I would like to see the administration do everything it can to accelerate the retooling assistance that Congress has already enacted," Obama said in his Nov. 7 news conference in Chicago.
The Bush administration then urged Congress to change the terms of the loan so the automakers could use it to cover operational costs. Democrats in Congress, however, balked at the idea, arguing it would undercut a major environmental effort.
Instead, Democrats called for the auto loan to be tapped from the $700 billion set aside to bail out financial institutions, a step the White House and congressional Republicans opposed.
After that, Obama limited his public comments to broad calls for assistance to the ailing industry. His most detailed remarks came during a "60 Minutes" interview that aired Sunday.
"For the auto industry to completely collapse would be a disaster in this kind of environment, not just for individual families but the repercussions across the economy would be dire. So it's my belief that we need to provide assistance to the auto industry. But I think that it can't be a blank check," he said.
Significantly, Obama downplayed one idea circulating among Republicans and some Democrats: Requiring that any government assistance to any of the Big Three automakers be conditioned on the company going through an accelerated Chapter 11 bankruptcy procedure. Dodd has been one of the Democrats expressing interest in that step.
Senate Democratic aides described a process called a "prepackaged bankruptcy," whereby a company would work out a reorganization plan with creditors, shareholders, labor unions and other stakeholders before filing for Chapter 11. The goal would be to not only restructure the company but also keep the time spent in Chapter 11 to a minimum.
"Banks aren't lending as it is," Obama said in the broadcast interview. "They're not even lending to businesses that are doing well, much less businesses that are doing poorly. And in that circumstance, the usual options may not be available."
Advocates of the idea, however, say the government could help by either providing the necessary financing directly or guaranteeing loans to the auto industry.
