Senator Sherrod Brown

WASHINGTON, D.C.—U.S. Senator Sherrod Brown (D-OH) today joined a group of fellow Senators to discuss the details of a bipartisan agreement on a bill to support the auto industry. In response to the agreement, Brown issued the following statement:

“When it comes to the auto industry, the cost of inaction is too high. Our nation’s economic security is tied to the auto industry, which provides more than 250,000 jobs in my state of Ohio alone. The auto industry needs both immediate assistance and long-term solutions. While this is an imperfect compromise, it would help keep the industry viable as we work on long-term solutions to protect jobs for middle class families.”

You can click here to see a gallery of photos from the event. A summary of the compromise legislation follows:

BIPARTISAN PROPOSAL TO PROVIDE BRIDGE LOANS TO THE AUTO INDUSTRY
November 20, 2008

•    Creates new program administered by Secretary of Commerce that would provide bridge loans to auto industry, with oversight board from all relevant agencies (from EPA to Transportation to Labor to Treasury).

•    Emergency bridge loans made to avoid a systemic adverse effect on the US economy or a major loss of US jobs.

•    Funding for the program comes from the loans for retooling passed as part of the 2007 Energy bill.  (i.e. no dollars come from new appropriations or from TARP.)

•    Repaid loans, interest, and proceeds from sale of equity stakes in the companies go back into the retooling loan program.

•    Before receiving these emergency loans, companies must show to the Secretary of Commerce that the funds will ensure their financial viability.

•    Loan recipients must agree to strong taxpayer protections, including limits on executive compensation, bonuses, and golden parachutes, as well as prohibitions on using these dollars for lobbying.

•    Emergency loans are available to auto manufacturers or component suppliers who have operated in the US for the last 20 years.

•    Funds to successful applicants would be disbursed in a few weeks from enactment.  Authority to make new loans under this program ends March 31, 2009. 

•    Interest rates would be 5 percent for the first five years, 9 percent thereafter.

•    Sponsors include Senators Levin, Bond, Stabenow, Voinovich, Brown, Specter, and Casey.