Journalists watch President Obama on television as he makes remarks on the American automotive industry and the bankruptcy of GM. | REUTERS GOP hopes GM is Obama's Katrina

General Motors hopes that bankruptcy will make the struggling automaker stronger and more competitive.

Republicans are hoping it will do the same for them.


The GOP sees President Barack Obama’s decision to help the unpopular carmaker as an easy opportunity to paint him as a bailout-happy, deficit-drunk spendthrift eager to impose a heavy government hand on a swath of industries.

The Republicans are linking the decision to pour about $50 billion into “Government Motors” to the new administration’s energy, health care and housing plans — all of which, they argue, will result in higher costs for consumers and bigger national deficits. Even the war spending bill now pending in Congress, they say, amounts to a “global bailout” for the International Monetary Fund.

“The pattern here is pretty clear,” House Minority leader John Boehner (R-Ohio) said Thursday. “Every time the president makes a so-called tough decision, it’s the American middle class that gets hit the hardest.”

Obama defends his administration as a reluctant and stern savior of an industry that’s vital to the American economy.

“I refused to kick the can down the road,” Obama said when he announced the bankruptcy details. “If GM and Chrysler and their stakeholders were willing to sacrifice for their companies’ survival and success; if they were willing to take the difficult but necessary steps to restructure and make themselves stronger, leaner and more competitive, then the United States government would stand behind them.”

But Republicans see in GM a chance for their party to come out with a unified message — a confidence grounded in the conservative belief that government involvement in private industry always spells disaster. And GM’s long history of financial problems — even in more prosperous times — also makes Republicans see the company as a big albatross around Obama’s neck.

“This is somewhere in between Baghdad and fixing the flood in Louisiana,” Grover Norquist, president of Americans for Tax Reform, said, comparing the GM decision to major stumbles by former President George W. Bush. Obama “has decided to take this over. He now owns it.”

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The strategy is not without risk: If the economy rebounds, Obama gets credit, and Republicans look like they were rooting for failure.

“If the economy improves, then the GM bailout is a political winner for Obama,” said longtime GOP consultant Dan Schnur, who heads the Jesse M. Unruh Institute of Politics at the University of Southern California. “It becomes hard to argue against any individual component of the recovery plan.”

Still, the GM bankruptcy plan is an inviting target for the GOP.

While concerns over offending moderates, women and Hispanics has some Republicans treading lightly on the Supreme Court nomination of Sonia Sotomayor, Detroit is a less sympathetic character in the political drama. Polling shows that a majority of voters oppose the federal loans and other types of government assistance given to General Motors and Chrysler over the past six months.

Republicans are more than happy to stoke the outrage.

In news conference after news conference this week, they slammed the administration for taking a roughly 60 percent stake in GM as part of the bankruptcy proceedings. That decision, they argue, will result in lawmakers getting intimately involved with the daily workings of the troubled company.

“I know that I don’t want Speaker Pelosi and Harry Reid designing the car that I drive, and I don’t think any New Yorker — or any American — does, either,” House Minority Whip Eric Cantor (R-Va.) said in a New York radio interview Thursday. “Washington, the president, Congress, none ... has any business running that car company. They’ll run it into the ground.”

Republicans also argue that the White House has put the taxpayers on the hook for billions of dollars, money that they may never see repaid if the company continues to founder.

Sen. Richard Shelby (R-Ala.) called the bankruptcy a “sad, sad day for the country.”

“I’ll feel better when they pay the taxpayers back and are making money,” he told POLITICO, noting that he expects the government will want to put more money into GM in the future. “That may be a long way away, if ever.”

Senate Republican Conference Chairman Lamar Alexander held two press conferences and took to cable news to tout his legislation that would give every taxpayer an equal share of GM stock.

“Under my proposal, the fiduciary duty that management owes to owners would be owed to millions of Americans owning new GM stock, not to a few Washington politicians,” the Tennessee Republican said on the Senate floor.

Sen. Mike Johanns (R-Neb.) filed a separate amendment requiring Congress to vote on any use of Troubled Asset Relief Program money that results in the government holding an ownership stake in a company — as is the case with GM.

And GOP Reps. Spencer Bachus of Alabama and Jeb Hensarling of Texas insinuated that the White House helped GM please the Democrats’ union allies, asking House Financial Services Committee Chairman Barney Frank (D-Mass.) to hold oversight hearings on how the Obama administration handled the bankruptcy arrangements. The government’s plan gives 17.5 percent of the company to a United Auto Workers union health care fund.

“If investors perceive that political might, rather than the rule of law, governs the financial markets, it will greatly discourage further participation in our markets — extending our economic downturn,” Hensarling said in a statement.

Rust Belt Republicans split with the party to support the bailout, siding with home-state interests such as auto workers and suppliers.

Boehner, aides note, has to tread more lightly because he represents Ohio, a state that’s home to several GM plants. But that didn’t stop him from using the GM rescue to hammer the administration’s larger agenda.

“This is not what the American middle class expected when they voted for change,” Boehner said. “Over and over again, people who followed the rules, people who pay their mortgages on time, pay their credit cards on time, go to work every day — they’re the ones that are getting it stuck to them.”