By Michael Barone, Thomas Jefferson Street blog.
Bush's auto bailout was announced Friday morning. Who wants to be the Grinch the week before Christmas? Not George W. Bush. Yet at the same time, he did not give General Motors and Chrysler a blank check. He imposed conditions, including the bondholders' haircut and reducing labor costs to the levels of those of foreign automakers in the U.S. This presumably will require negotiations on the bondholders' haircut and the UAW's contract, and the March 31 deadline means it will be the Obama Treasury Department that will determine whether the conditions have been met. This sounds to me much like the approach taken by Sen. Bob Corker in the Senate, an approach that was vetoed by the UAW and therefore by Democratic senators. It shows that there is still serious power in a lame duck White House—but also that its work is only temporary and to some extent can be undone by the incoming administration. This looks less like a solution and more like a continuing story, with lots of twists and turns available. But evidently the dire cash positions of General Motors and Chrysler prevented them from holding out until January 20, when a new Democratic administration and Congress could have voted them the money without requiring any concessions from the UAW beyond those it made (and in fairness they're not trivial) in their fall 2007 contracts.
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