Says Congressman Steve Rothman voted against funding for President Barack Obama’s auto bailout and would have let automakers go bankrupt.
Bill Pascrell on Monday, March 19th, 2012 in a news release
Bill Pascrell claims Steve Rothman voted against funding for auto bailout and would have let automakers go bankrupt
One of the defining achievements of President Barack Obama’s re-election bid, the federal assistance given to U.S. automakers, is dividing two fellow Democrats mired in their own political battle in northern New Jersey.
The campaign of U.S. Rep. Bill Pascrell charges that U.S. Rep. Steve Rothman opposed funding for Obama’s auto bailout, and would have let the industry slide into bankruptcy. The two congressmen are preparing to face off June 5 for the Democratic nomination in the 9th Congressional District.
"Rothman voted AGAINST funding for President Obama's auto industry rescue package," Justin Myers, Pascrell’s campaign manager, said in a March 19 news release, "The same guy who touts backing President Obama’s campaign did not even support singularly one of the most important policies that helped turn the economy from the brink of disaster. Just like Mitt Romney, Rothman would have ‘Let Detroit Go Bankrupt’."
It’s accurate that Rothman voted against the funding mechanism that would later support the auto bailout, but the Pascrell campaign went too far in suggesting that Rothman did not support assisting U.S. automakers at all, PolitiFact New Jersey found.
First, let’s explain the funding behind the auto bailout.
The federal assistance provided to U.S. automakers came from the Troubled Asset Relief Program, or TARP, created in October 2008 amid the ongoing financial crisis. Pascrell voted for the bill creating TARP, and Rothman voted against it.
TARP was originally designed to assist the nation’s financial institutions, but the administration of President George W. Bush later agreed in December 2008 to use TARP funds for the distressed automakers. That policy continued under Obama.
So, Rothman voted against the funding that ultimately went toward the auto bailout.
But two points undercut the Pascrell campaign’s argument that "Rothman would have ‘Let Detroit Go Bankrupt’."
First, when Rothman voted against the bill creating TARP, the money was intended to purchase troubled assets from financial institutions -- not bail out automakers. According to a September 2009 report by the Congressional Oversight Panel, "Members of Congress who debated this legislation in late 2008 believed they were debating a bill aimed at banks and the financial sector."
That’s why it is wrong to interpret Rothman’s no vote as a vote against helping the auto industry.
Paul Swibinski, a consultant to Rothman’s campaign, pointed to the original purpose of TARP to show that Myers’ statement is inaccurate.
"The TARP bill Steve opposed clearly stated that the purpose of the bill was to purchase troubled assets of ‘financial institutions’ – it made no mention of the auto industry or any manufacturing," Swibinski said in an e-mail. "Steve had no idea that Bush would use a portion of the money for Detroit."
About two months after TARP was created, Rothman voted for legislation designed to provide $14 billion in loans to the auto companies. That legislation was blocked in the U.S. Senate, leading the Bush administration to use TARP funds for the auto industry.
By supporting that legislation, Rothman indicated his support for some form of federal assistance for U.S. automakers.
But Pascrell spokesman Sean Darcy maintained that Rothman was not interested in providing money to rescue the auto industry.
"The fact is that he voted against TARP and that money was used to save the auto industry," Darcy said in an e-mail. "So it is not ‘wrong’ to suggest that Rothman would have let Detroit go bankrupt if he got his way."
In a news release, the Pascrell campaign argued that Rothman "voted AGAINST funding for President Obama's auto industry rescue package" and "would have ‘Let Detroit Go Bankrupt’."
It is true that Rothman voted against the bill creating TARP, which was later used to fund the auto bailout. But at the time of that vote, the program was not intended to assist the auto companies.
Also, Rothman indicated a willingness to provide federal assistance for automakers through his support of a separate rescue package that was later blocked in the Senate.
We rate the statement Half True.
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Published: Thursday, March 29th, 2012 at 7:30 a.m.
Rothman Opposes Cornerstone Of Obama Re-Elect Platform, a press release issued by Congressman Bill Pascrell’s campaign, March 19, 2012
PolitiFact, Obama campaign movie says auto bailout money had run out when he took office, March 19, 2012
U.S. Department of the Treasury, Office of Financial Stability: Agency Financial Report, Fiscal Year 2009, accessed March 20, 2012
Congressional Oversight Panel, September Oversight Report: The Use of TARP Funds in the Support and Reorganization of the Domestic Automotive Industry, Sept. 9, 2009
Rothman Supports Short-Term Loans to Ailing Auto Companies, a press release issued by Congressman Steve Rothman, Dec. 11, 2008
Email interview with Sean Darcy, spokesman for Congressman Bill Pascrell’s campaign, March 19-20, 2012
Congressional Research Service, U.S. Motor Vehicle Industry: Federal Financial Assistance and Restructuring, Jan. 30, 2009
The American Presidency Project, George W. Bush: Remarks on the American Auto Industry, Dec. 19, 2008
The American Presidency Project, George W. Bush: Press Briefing by Press Secretary Dana Perino and Assistant to the President and Deputy Chief of Staff for Policy Joel Kaplan, Dec. 19, 2008
CBS News, Support Grows For Using TARP Funds For Big Three, Dec. 12, 2008
Congressional Research Service, Government Interventions in Response to Financial Turmoil, Feb. 1, 2010
The American Presidency Project, George W. Bush: Statement of Administration Policy: H.R. 1424 - Emergency Economic Stabilization Act of 2008, Energy Improvement and Extension Act of 2008, and Tax Extenders and Alternative Minimum Tax Relief Act of 2008, Oct. 3, 2008
Phone and email interviews with Matthew Anderson, spokesman for the U.S. Department of the Treasury, March 21 and 23, 2012
New York Times, White House Explores Aid for Auto Deal, Oct. 28, 2008
U.S. Government Accountability Office, Auto Industry: Summary of Government Efforts and Automakers’ Restructuring to Date, April 2009
New York Times, Pelosi and Reid Urge Aid for U.S. Automakers, Nov. 8, 2008
U.S. House Committee on Financial Services, Testimony by Treasury Secretary Henry M. Paulson, Jr. Before The House Committee on Financial Services, Nov. 18, 2008
The American Presidency Project, George W. Bush: The President’s Radio Address, Oct. 4, 2008
Office of the Special Inspector General for the Troubled Asset Relief Program, Additional Insight on Use of Troubled Asset Relief Program Funds, Dec. 10, 2009
Congressional Research Service, Troubled Asset Relief Program (TARP): Implementation and Status, March 4, 2011
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