Former President George W. Bush meeting with his advisers in the Oval Office.
Though they have become a target of the Republican right wing, former President George W. Bush is defending the decision to offer bailouts to General Motors and Chrysler.
Warning he could have left “a mess” for his successor, Barack Obama, Bush says the use of federal funds to keep the two carmakers alive was “the only option.”
The presidential memoir, titled “Decision Points,” and released today by Crown Publishers, underscores the former chief executives concerns about not just the worsening economy but the potential catastrophe of failing to take prompt action “to safeguard American workers and families.
Ultimately, Bush approved an interim bailout, worth $17.4 billion, for GM and Chrysler. He failed to get Congressional approval for the helping hand, however, after a disastrous appearance by the CEOs of the Detroit Big Three before two Capitol Hill panels, and had to instead use his authority to tap the so-called TARP fund for the cash.
The Troubled Asset Relief Program was originally set up to provide $700 billion for the nation’s faltering banking system.
One of the big surprises of “Decision Points” is that the first request for a bailout came from GM Chairman Rick Wagoner prior to the 2008 presidential election. The former president initially rejected that plea – which ran counter to his basic political philosophy — but changed his mind soon after the vote, recognizing the magnitude of the fast-worsening crisis.
“The immediate bankruptcy of the Big Three could cost more than a million jobs, decrease tax revenues by $150 billion and set back America’s GDP by hundreds of billions of dollars,” the former president says he realized.
Echoing the harsh words of Steve Rattner, who became the first car czar of the Obama Administration, Bush cites “decades of poor management” for the decline of GM and Chrysler.
The bailout has been one of the most controversial actions taken by Washington in recent years, critics routinely referring to GM as “Government Motors,” and some even calling for a boycott of the maker, which is now 60.1% owned by the U.S. Treasury.
Getting rid of that derisive nickname is something GM’s new CEO Dan Akerson has said he wants to do as soon as possible. The maker recently announced details of its IPO, which will reduce the government stake to 40%. It is expected to be held on November 18th.
While GM and Chrysler won’t comment on the new Bush book, proponents insist that the Detroit bailout was one of the more courageous and least politically motivated actions of the former administration.
For his part, the last president says, “It was frustrating to have the automakers’ rescue be my last major economic decision.”