CAR COMPANIES COP CONGRESSIONAL LOANS
By Laverne Tom | September 28th, 2008 | Category: Business | No Comments »These days, 11-figure expenditures barely attract notice. While Congress was grappling with the 12-figure $700 bailout plan for the financial industry, the powerful Michigan delegation got House approval for $25 billion in loans for the troubled U.S. auto industry.
Lawmakers that pushed for the legislation hailed it as key to saving thousands of jobs in the state. Detroit Rep. Carolyn Cheeks Kilpatrick, chair of the 43-member Congressional Black Caucus, played a major role in passage of the legislation. What many will call “corporate welfare” enables General Motors, Ford and Chrysler to get at least $5 billion each. This allows them to borrow money at interest rates as low as 4 percent. Over several years, the automakers could save hundreds of millions in financing costs. The car companies will have five years before they start repaying the loans.