Standing Firm on Auto Dealers
Thursday, July 16, 2009 at 12:09 AM EDT
Over the past year, the U.S. government has acquired an unprecedented investment portfolio, including a majority stake in GM and a large ownership stake in Chrysler. These investments have raised a plethora of difficult policy challenges. One of the most important is the ongoing risk that private business decisions may get transformed into public policy issues. Or, put more bluntly, that policymakers might use the ownership stakes as justification for and leverage to pursue their own policy agendas, regardless of whether they would be good for the companies.
Yesterdayâ€™s newspapers provided an excellent example of this risk. Some lawmakers want to use legislation â€” the annual appropriations bill that funds financial services and general government â€” to restore the franchise agreements of several thousand dealers who were terminated as part of the restructuring of GM and Chrysler. Itâ€™s easy to see how such a proposal can gain traction in the House of Representatives. Every terminated dealership will get a sympathetic hearing, at a minimum, from their local representative. But such meddling is not in the interests of GM and Chrysler, nor the nation at large.
Happily, the Obama Administration has come out against these efforts. In a Statement of Administration Policy on the appropriations bill released Wednesday, the Administration wrote:
This opposition is not as strongly- worded as it could be (a veto threat, for example), but it is a good sign.
P.S. For an example of strongly-worded opposition, see the Administrationâ€™s SAP on the annual authorization bill for defense spending. The Administration has rightly drawn the line against unnecessary purchases of F-22 fighters, so it is threatening a veto:
This article originally appeared on Donald Marron.