The President’s lifeline to the auto industry includes the provision Senate Republicans were insisting on last week, which scuttled the deal — cuts in UAW wages and benefits to make them comparable with wages and benefits in non-union automakers’ plants (all owned by foreign automakers, all mostly in the South). Last week, Bush lobbied against this provision. Now he’s adopted it, without any legislation at all.
What’s really going on? Bush doesn’t want messy bankruptcies of GM and Chrysler, potentially threatening more than a million jobs, to tarnish his last weeks in office. So he’s giving the automakers what they need to tide them over, and kicking the can to the Obama administration. But nor does he want to leave office slapping down Senate Republicans, so he’s giving them what they demanded, too.
How to square the circle? Read the fine print: The automakers don’t really have to bring wages and benefits down in order to get the money. That requirement can be “modified” in negotiations with the UAW. So everyone gets a Christmas present, and W. leaves town before the bill arrives.
Originally published at Robert Reich’s Blog and reproduced here with the author’s permission.