Ryan, unlike Romney, supported 2008 loans to automakers
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DETROIT -- U.S. Rep. Paul Ryan, the presumptive Republican vice presidential nominee, voted in December 2008 to support the bailout of Chrysler and General Motors, which most Republicans -- including Mitt Romney -- didn't support.
Romney, the presumptive Republican presidential nominee, named Ryan his running mate on Saturday.
Ryan, of Wisconsin, was one of 32 House Republicans to break with their party and vote to support a bill that would have approved a $14 billion loan to Chrysler and GM from a previously approved Department of Energy loan to keep the troubled automakers out of bankruptcy.
The bill died in the Senate, and President George W. Bush ultimately authorized $13.4 billion in loans to be taken from the $700 billion Troubled Asset Relief Program fund used to bail out the financial sector.
Ryan defended the 2008 vote by arguing that the loan wouldn't use any tax dollars that hadn't already been appropriated.
"I've maintained that any assistance to the domestic auto industry should be drawn from previously approved funds from a U.S. Department of Energy loan package, rather than divert resources from the financial rescue package or rely on additional taxpayer dollars," Ryan said in a statement at the time.
But in a June 2010 interview with the Fox Business Network, Ryan said he wouldn't have voted for the measure if he had known the funds for the loans to GM and Chrysler were going to come from TARP.
"The whole purpose of voting for that auto bill was to prevent the auto companies from getting TARP dollars," Ryan told Fox Business. "What happened? It didn't get that money and President Bush, followed by President Obama gave them TARP and now TARP has become this revolving government slush fund."
In total, the U.S. Treasury Department ended up spending $85 billion on the bailout of the automakers. In a report released Friday, the Treasury Department said it's expected to lose about $25 billion on the bailout, according to The Detroit News.
Ryan's congressional district includes Janesville, Wis., home to a GM assembly plant. GM closed the plant in 2008, and about 5,000 jobs at the factory and other auto-related companies in the area were lost. In the December 2008 statement, Ryan said he supported the bailout bill to ensure retirees didn't lose their benefits.
"At the forefront of my mind are jobs in Southern Wisconsin and the retiree commitments to workers that could be placed in jeopardy under certain bankruptcy scenarios," Ryan said in the statement.
"To be clear, this bill is not intended to save the American auto industry and makes no guarantees that layoffs in this industry will end. Congress must stop overselling what it can do. At the very least, I am hopeful that by extending these loans to the American auto manufacturers, bankruptcy will be avoided in the near term and protections for retirees will remain intact."
Though Ryan supported the initial bailout to help the automakers avoid bankruptcy, Romney has, time and time again, said that a managed bankruptcy would have been the best option for turning GM and Chrysler around.
In an often-cited 2008 opinion piece in The New York Times entitled "Let Detroit Go Bankrupt," Romney wrote that the government shouldn't provide bailout funds.
"Without that bailout, Detroit will need to drastically restructure itself," Romney wrote. "With it, the automakers will stay the course -- the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses."
In 2008, Romney campaigned for the Republican presidential nomination against U.S. Sen. John McCain, the eventual Republican nominee for president, but dropped out of the race in February 2008 after failing to gain momentum in the early primaries.
You can reach Joseph Lichterman at jlichterman@crain.com.
