Key ally to auto makers may be replaced

November 19, 2008 7:13:30 PM PST
A shake-up in Washington made Wednesday a very bad day for the U.S. auto industry. Michigan Congressman John Dingell (D) is a key ally of the car makers. He is likely to be replaced as head of the House Energy and Commerce Committee, by California Democrat Henry Waxman. Waxman is a major player in the fight against global warming.

This appears to be another milepost in a continuing shift in democratic politics in Washington. John Dingell has been a big friend to U.S. automakers and a big impediment to higher fuel efficiency standards that have been opposed by the industry.

Last year Dingell and Speaker of the House Nancy Pelosi (D) squared off over fuel efficiency standards. Dingell advocating for lower standards to help the auto industry keep down costs, while Pelosi pushed for higher standards in order to help fight global warming. That tug of war may have ended with Dingell on the verge of losing his chairmanship of the House Energy and Commerce Committee.

"Now that he's not the chairman, he can't control the hearings, he can't control speakers that come in," said ABC7's political analyst Bruce Cain.

And Dingell can't control the bills that come out of his committee. The U.S. auto industry will lose its biggest voice on Capitol Hill.

"It basically tells you this is something that Obama wants, it's something that Nancy Pelosi wants, and that's where the majority of Democrats in congress are right now," said Cain.

San Mateo Democratic Congresswoman Jackie Speier laid into the CEO's of Ford, Chrysler and General Motors over fuel efficiency standards.

The big three came to Congress seeking $25 billion to keep from going bankrupt. Speier tied her support for the money to accelerating those standards.

"I for one want to see those standards met by 2015 and my question to you is if we give you this loan will you make a commitment to meet those standards by 2015?" said Speier.

The big three essentially told Speier no.

"I don't think it's technically possible to move that ahead," said Alan Fulally, Ford's CEO.

Stanford economist Professor John Taylor Ph.D., says $25 billion for auto makers isn't a good idea.

"No I don't think it is, I think right now if you look at their testimony, what they said, they said they need help because of the credit crunch. I say everybody needs because of the credit crunch," said Taylor.

Taylor, an economic advisor to Senator John McCain (R) of Arizona was also on Capitol Hill testifying about the effects of the last stimulus package.

His figures show that while the rebate checks sent out last summer helped raise disposable income, that extra money didn't result in increased spending and therefore didn't stimulate the economy.

"So I think what we should learn is that any additional actions to get the economy moving should be longer lasting," said Taylor.

The longer lasting measures that Taylor is advocating are tax cuts and not raising taxes on anyone. It's pretty much the same argument that John McCain made in his campaign. However, as we've seen with John Dingell's fate, it's what Barack Obama and Nancy Pelosi want, that's propelling change in Washington.


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