U.S. Congressman John Boozman 3rd District of Arkansas

House Seal Outline

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Washington, Dec 16, 2008 -

U.S. Representative John Boozman (R-AR) joined with 21 other lawmakers in requesting that President Bush not transfer funds authorized in the Emergency Economic Stability Act to automakers.

Boozman voted against the Auto Industry Financing and Restructuring Act which would have provided loans up to $14 billion to the “Big Three” automakers. The legislation passed the U.S. House of Representatives by a vote of 237 to 170, but bill failed in the Senate. The following day the White House announced it would consider using the funds already appropriated by Congress in the Emergency Economic Stability Act. The text of the letter is as follows:

    “We are writing to express our concerns over the possibility of funding from the Troubled Asset Relief Program (TARP) being used to bail out the “Big Three” auto manufactures. The Emergency Economic Stabilization Act was intended to provide stability to the nation’s lending system- not to provide taxpayer-funded capital infusion to favored businesses. The legislation allows the $700 billion to be used for leveraging “financial institutions,” which auto manufacturers surely are not. Congress never voted for a federal bailout of the automobile industry, and the only way for TARP funds to be diverted to domestic automakers is with explicit congressional approval.

    No one wants the “Big Three” to fail, and we are not proposing it. But the federal government cannot undo decades of mismanagement, so we are faced with a decision about how to deal with it. Exercising options already afforded them by law, under Chapter 11 reorganization for example, the American automobile industry can make the necessary reforms and could soon return to profitability. A federal bailout of the automobile industry, on the other hand, would put taxpayer money at risk, shield the companies from making the reforms necessary to restore competitiveness again, and set a costly precedent that the federal government will bailout other failing companies and industries.

    Tempting as it is to step in with a federal bailout, American taxpayers cannot afford to save every company facing financial peril. Last year’s federal deficit was the highest nominal deficit in U.S. history, and many economists believe this year’s deficit will exceed $1 trillion.

    For the long-term stability of our nation and our automotive manufacturers, we urge you to not expand the use of TARP money to bailout American auto manufacturers.