The 2008 and 2009 bailout of the U.S. auto industry would not have taken place if Congress had been more specific in how then President George W. Bush could spend the money it gave him, a lawmaker tasked with government oversight said on Sunday.
Rep. Darrell Issa, R-Calif., who will head the House Oversight Committee in the newly-elected Congress for the next two years, made the comments in a televised interview on Sunday.
Issa said Monday he plans to investigate regulation's impact on job creation, the role of government sponsored companies in the foreclosure crisis, recalls issued by government regulators and the failure of a government commission to agree on what caused the financial markets to nearly collapse in recent years.
Issa said on Sunday that money authorized by Congress in 2008 was basically used like presidential earmarks, handing them out, deciding what to do with General Motors and Chrysler, who lives, who dies, what union gets the benefit.
All of that would not have been possible if Congress had done its job, if we'd said, Mr. President, in the case of President Bush, what is it you need; tell us blow by blow, dollar by dollar, and we will give you the money on a case by case basis, he said.
Congress authorized the Bush Administration to spend up to $700 billion to stabilize the U.S. economy by purchasing distressed assets.
The money was primarily used to buy assets related to the housing market as the financial industry witnessed the failure of several large investment banks. However President Bush also authorized the use of $17.4 billion in December of 2008 to help GM and Chrysler avoid a bankruptcy.
On assuming the presidency, Obama used funds from President Bush's Troubled Asset Relief Program - created under the law passed by Congress - to spend additional money on the car industry.
As of December 16, 2010, the U.S. government had spent about $76 billion in loans or equity investments in General Motors, GMAC, Chrysler and Chrysler Financial in order to avoid a disorderly bankruptcy of one or more auto companies, according to FinancialStability.gov, a government website tracking spending to keep the economy stable in wake of the 2008 financial crisis.
Obama has defended the bailout as necessary avoid the industry's collapse, subsequent loss of jobs and damage to the economy.