In Delphi scandal’s wake, Obama Treasury Dept. shares credit for auto bailout with Bush administration
President Barack Obama’s administration is sharing credit for the 2009 auto bailout with the George W. Bush administration, as pieces of the Delphi salaried retirees pension scandal start to come under fire from three different House committees.
“Current and former Treasury officials have explained in congressional testimony in 2009, 2010, 2011 and 2012 that the previous administration provided temporary loans to General Motors and Chrysler to avoid uncontrolled liquidations of these companies at a time when our economy and financial system were already severely stressed,” Assistant Secretary for Legislative Affairs Alastair Fitzpayne wrote in a Sept. 24 letter to House Education and Workforce Committee Chairman Rep. John Kline.
“President Obama agreed to extend that assistance provided that the companies produced viability plans showing how they could become competitive.”
The statement from one of the Treasury Department’s highest-ranking officials that Bush — not Obama — initiated the auto bailout stands in contrast with the rhetoric Democrats have pumped on the campaign trail. As recently as at the Democratic National Convention in early September, Vice President Joe Biden cited the auto bailout and the killing of Osama bin Laden as Obama’s biggest successes heading into the home stretch of the election season.
“Osama bin Laden is dead and General Motors is alive,” Biden is fond of saying.
Fitzpayne’s letter to Kline came in response to his and Education and Workforce Committee subcommittee on Health, Employment, Labor and Pensions Chairman Rep. Phil Roe’s renewed requests for documents in relation to the Delphi pension scandal.
GOP members on the committee had asked the Treasury Department to produce documents in Dec. 2009, and although by April 2010 Treasury Secretary Tim Geithner’s team had agreed to produce those documents, they followed through only this week. A committee spokesman told The Daily Caller that Treasury and the Pension Benefit Guaranty Corporation (PBGC) both provided some documents to the committee ahead of the Wednesday, Sept. 26, deadline.
During the auto bailout, a decision was made to terminate the pension plans for 20,000 nonunion autoworker retirees from Delphi, an auto parts manufacturer. While those nonunion retirees lost significant portions of their pensions, health care and life insurance benefits from this deal, their unionized peers saw their benefits fulfilled.
For years since, the Obama administration has claimed the PBGC made the decision and said its own officials were not involved. Email evidence TheDC obtained and published in early August, however, shows that’s not the case. (RELATED: Emails: Geithner, Treasury drove cutoff of non-union Delphi workers’ pensions)
One group of emails demonstrated that political officials from the White House and the Treasury Department drove the cutoff of the nonunion retirees’ pension plans. Another tranche of emails showed that the former firms of two different members of the Obama Auto Task Force benefited from that deal.
The only thing the Obama administration points to as evidence that its political officials had nothing to do with the decision to terminate the Delphi pensions is a Government Accountability Office (GAO) report published in December 2011. In that report, the GAO wrote that it found “the steps taken to terminate the plans and reduce some benefits according to statutory limits are consistent with PBGC’s usual actions when terminating large plans.”
GAO, however, has confirmed that its investigators didn’t have the emails TheDC published when it released its report.
In her letter to Kline, Fitzpayne heavily cites that incomplete GAO report, offering no other evidence supporting the administration’s version of events.
Kline’s committee is the third House body to launch a probe into the matter. The House Committee on Oversight and Government Reform has been digging into the Delphi pensions for years; the House Ways and Means Committee has launched its own investigation in recent weeks following TheDC’s reporting.
Treasury and the PBGC have produced some documents to the Ways and Means Committee, but the White House has so far not complied with the Ways and Means Committee’s request.
In a letter to Kline’s committee accompanying its document production, a PBGC representative did not mention the incomplete GAO report. A representative for the PBGC who told TheDC about the document production refused to answer followup questions about the PBGC’s stance on the GAO report.
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09-2012 Treasury and PBGC Delphi letters