Washington, D.C. – U.S. House Speaker, Senate Majority Leader Harry Reid, and other representatives have sent a letter to President George W. Bush, urging him to use the authority provided under the Troubled Assets Relief Program (TARP) to provided limited, temporary assistance to the automobile industry during the financial crisis.
The letter notes that failure of the “Detroit Three” would have a major direct and negative effect on the financial sector, not just on the economy as a whole. The Treasury Department has stated that funding from the Emergency Economic Stabilization Act (EESA), which covers TARP, should only be used to protect the U.S. financial sector.
The letter states that, “Your decision to utilize the TARP funds, or to work with the Federal Reserve to make available assistance through its existing lending programs, or both, are essential to the Congress’ ability to address this critical economic situation in a timely manner, and would also eliminate the uncertainties inherent in the legislative process.”
The group had earlier urged that US$25 billion of the funds provided in the EESA can and should be used for emergency bridge loans for the domestic auto industry.