Dec 5, 2008 11:00 am US/Eastern
Bush: Auto Industry Must Pay Back Federal Aid
WASHINGTON (AP) ―
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Using the word "recession" for the first time to describe the U.S. economy, President George W. Bush demanded that Congress adopt his approach to an auto bailout and require car companies to pay back any federal aid. (File)
Brendan Hoffman
Using the word "recession" for the first time to describe the U.S. economy, President George W. Bush demanded that Congress adopt his approach to an auto bailout and require car companies to pay back any federal aid.
But he displayed skepticism about the wisdom of new aid, saying he is concerned that some of Detroit's Big Three may not survive. So while urging Congress to act next week to help the battered industry, Bush urged a Congress controlled by opposition Democrats to follow his plan.
The president supports adjusting an existing $25 billion loan program for the automakers, so that the money would be available more quickly and for more urgent needs than its original long-term purpose of helping to retool factories to produce more energy-efficient cars.
"I am concerned about the viability of the automobile companies," he told reporters on the South Lawn. "I am concerned about those who work for the automobile companies and their families. And likewise, I am concerned about taxpayer money being provided to these companies that may not survive."
With only 46 days left in office before President-elect Barack Obama takes over, Bush declared: "It's important to make sure that taxpayers' money be paid back if any is given to the companies."
The automakers are seeking from Washington a huge cash infusion of up to $34 billion, beyond the existing loan program. Lawmakers are considering the idea, but there is uncertainty about the level of support on Capitol Hill for that approach.
The president spoke not long after the release of a government report showing the biggest month of job losses in 34 years.
The White House refused to embrace the term recession until Monday, when a panel for the National Bureau of Economic Research gave official word that the economy is in a recession and has been since last December.
"Our economy is in a recession," Bush said flatly. "This is in large part because of severe problems in our housing, credit and financial markets, which have resulted in significant job losses."
Reacting to the jobs report, which showed a huge jump in the unemployment rate to 6.7 percent, Bush expressed deep concern for Americans who have lost jobs, but also said there are some encouraging signs about the credit markets. "There is still more work to do," he said. "My administration is committed to ensuring that our economy succeeds."
At 12 months, the current recession is already the longest since a severe 16-month slump in 1981-82. Many economists say this downturn will ultimately set a new record for the post-World War II period.
During Bush's eight years in office, the United States has fallen into two recessions. The first one started in March 2001 and ended in November of that year.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
Timeline: U.S. Credit Crunch & Financial Failures
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