TARP cannot be used for an auto bailout.

[taught_me_patience]

Not legally permissible:

Section 101(a) of the bill that authorized TARP provides as follows:

(a) AUTHORITY.—The Secretary is authorized to establish the Troubled Asset Relief Program (or ‘‘TARP’’) to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution, on such terms and conditions as are determined by the Secretary, and in accordance with this Act and the policies and procedures developed and published by the Secretary.

"Financial Institution" is defined as:

(5) FINANCIAL INSTITUTION.—The term ‘‘financial institution’’
means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands, and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign government.



Auto makers are not “financial institutions”!

[napi21]

1. OK, then write the check to a financial institution with the

explicit directive that it will be used ONLY forlending to the auto cos.

[MineralMan]

2. But they're "troubled assets,"

so, they can buy up indebtedness to financial institutions by the auto makers.

Same as cash.

[Hokie]

3. Yes they are

I think all the auto makers have financial divisions. For example, GMAC. I think these are part of the reason they are in trouble.

[napi21]

5. All 3 car cos used to hace a financial division. I don't know if

Ford Motor Credit & Chrysler Credit still exist or not, but GMAC does.

[taught_me_patience]

6. Too bad GM no longer ownes GMAC

http://en.wikipedia.org/wiki/GMAC

To raise money for reorganization, General Motors divested various assets including GMAC. This divestiture was accelerated at the prompting of investor Kirk Kerkorian and his former representative on GM's board, Jerome York.

On March 23, 2006, General Motors announced that it completed the sale of a 78% interest in GMAC Commercial Holding, its commercial real estate subsidiary, for $1.5 billion in cash to a private investment group including Kohlberg Kravis Roberts & Co., Five Mile Capital Partners and Goldman Sachs Capital Partners. The deal includes the payoff of all intracompany debt owed to GMAC, bringing the total value of the deal to $9 billion. The new entity, in which GMAC owns a 21% interest, is known as Capmark Financial Group, Inc.

On April 3, 2006, GM announced that it would sell 51% of GMAC as a whole to a consortium led by Cerberus Capital Management, raising $14 billion over 3 years. Investors also include Citigroup's private equity arm and Aozora Bank of Japan. The group will pay GM $7.4 billion in cash at closing. GM will retain approximately $20 billion in automobile financing worth an estimated $4 billion over three years. The sale was completed in November 2006.

It was revealed on October 10, 2008 that GM may exchange its remaining 49% stake in GMAC to Cerberus for Chrysler LLC, potentially merging two of Detroit's "Big Three" automakers.

[Hannah Bell]

28. they still own 49%.

[Bozita]

4. When did Bush ever give a shit about any bill?

[KewlKat]

7. Well, why can't we, the people, pool what change we have

and loan them the money? Screw DC.

[Citizen Number 9]

9. Buy a car

Then, you get something for it instead of a promise to pay back.

Cars are terrifically cheap right now.

[Veritas_et_Aequitas]

8. Since when has Bush cared about the law? nt

[bluestateguy]

10. The irony

If Bush disregarded the law (as he often does) this time it would be a good thing.

[jpljr77]

11. Four little words in that bill: "but not limited to" n/t

s

[taught_me_patience]

13. Then why even have a vote on a seperate bill in the senate?

If they can do whatever they want with that money.

[TexasObserver]

19. Indeed. Adding "including, but not limited to" means it is a blank check.

The specific language only demonstrates that the TARP is available for the stated purposes, without question. But any time the language "including, but not limited to" is added to legal definitions, it means the person or entity to whom the power is granted has great discretion in what they can do.

[lligrd]

12. Why Can't Those Receiving The TARP Funds Be Told To

friggen lend it to the auto companies? What the heck are they doing with the funds anyway?

[Geek_Girl]

15. Giving out bonuses

nt

[Ioo]

14. I am sure they owe some bank money... we will pay them

[PVnRT]

16. Since when has the law stood in the way of Bush?

Fuck it, this time I'm with him if he orders TARP to bail out the autos.

[Subdivisions]

17. Hence GMAC's attempt to become a bank holding company. n/t

[TexasObserver]

18. You're wrong.

1. Who's going to stop them?

2. They've already shown they'll spend the money however they damn well please.

3. The auto industry is inextricably tied to insurance and lending, and in fact, does provide "banking" services in the form of loans.

You see, interpreting the language is up to those who are spending the money, not you. Even if you try to run out and file a federal lawsuit, seeking to stop it, your case would likely be thrown out for lack of standing.

[DemoTex]

20. Bu$h could modify bill with "signing statement."

Or Bu$h could issue an Executive Order modifying the bill like he just did modifying the Endangered Species Act of 1973.

If the White House wants this auto bailout, then they will have it. Period.

[TexasObserver]

23. Yes, if Bush wants to do it, he'll find a way to do it.

[JDPriestly]

21. GMAC is trying to establish status as a bank.

It lends money, accepts deposits and wants to be recognized as a bank in order to get TARP funds. I read that it has not been able to get the cooperation of its investors in order to do that.

http://www.cfo.com/article.cfm/12664724/c_12666022?f=home_todayinfinance

It's been a crazy few days as news broke that Chrysler and General Motors have been in talks to combine operations. It turns out that there's a pretty significant back-story to these proceedings, and it involves Cerberus Capital Management's possible desire to shed its car-building operations and acquire the rest of GMAC, of which it already holds a controlling stake of 51%, with GM holding holding the other 49%. According to reports, Cerberus would like to combine Chrysler Financial with GMAC, which would allow it to merge the offices of the two financial institutions and reduce costs. All right, that might make some sense, but what about merging the two automakers? That's the part that seems so confusing to analysts and us meager bloggers. Somehow, we feel certain that there's more to this story, which we'll be hearing about for some time.

http://www.autoblog.com/2008/10/12/gm-cerberus-talks-over-full-ownership-of-gmac/

I've been posting a lot about Cerberus. It is a vampire company -- buys troubled companies and sucks whatever remains of the blood out of them and then spits them up. It owns 80% of Chrysler and 51% of GM. Good luck.

Congress needs to demand to review the Cerberus balance sheets.

[Gothmog]

22. Just Guarantee GM's commercial paper

The TARP money and the Treasury has the right to buy commercial paper and other financial assets. Have GM issue commercial paper and the TARP money can be used to buy such financial asset.

[kentuck]

24. And neither can it be used to buy up your competition.

But they did it...

[ConsAreLiars]

25. When did the "letter of the law" ever mean anything to the Cons who now

write checks to anyone for whatever reason? If the Constitution doesn't stop them from violating the Bill of Rights, and every bit of legislation that they don't like gets crossed out via signing statements why do you imagine some phrase in this bill would mean anything at all.

[Doctor Cynic]

26. If all else fails the auto companies themselves can convert into bank holdings.

[BzaDem]

27. This is only part of the bill. The bill also authorized the U.S. to buy equity stakes.