GOP Rep Draws Broad Party Support With Anti-Bailout Amendment Proposal
{{#rendered}} {{/rendered}}General Motors Silverado and GMC Sierra heavy-duty pickups are assembled at the Flint Assembly plant in Flint, Mich., on Jan. 24. (AP)
A Republican lawmaker backed by the top brass in his party has introduced a constitutional amendment aimed at putting the kibosh on some government bailouts, barring Washington from buying up stock or equity in private companies.
Like any amendment, the proposal by Rep. Mike Turner, R-Ohio, would face a long, tortuous and uphill road. But Turner introduced the measure Monday with the support of 96 co-sponsors, including House Speaker John Boehner, R-Ohio, and House Majority Leader Eric Cantor, R-Va.
Turner said the proposed amendment is critical in order to curb the government's "deepening involvement in the nation's private industry and financial sector."
{{#rendered}} {{/rendered}}"The administration has fired CEOs, set compensation levels for private-sector employees and picked winners and losers, deciding which employee pensions would be 'topped off' and who would lose their hard-earned retirement," Turner said.
The proposal would still allow the government to provide loans to struggling companies, but it would prohibit the government from owning or scooping up "stock or equity of any company, association or corporation."
Presumably, that would have nixed the Obama administration's intervention in the Detroit auto industry, through which the federal government picked up a 61 percent ownership stake in GM and a much smaller stake in Chrysler.
{{#rendered}} {{/rendered}}However, those companies have started to bounce back. GM, derided as "government motors" in the wake of the auto bailout, began trading its stock on Wall Street again in November after emerging from bankruptcy proceedings. The government has unloaded much of its stake in the company and so far has recovered about half of its $50 billion infusion.
In addition, the total cost to taxpayers from the $700 billion Wall Street bailout has been whittled down to about $25 billion, according to a Congressional Budget Office estimate in November.
Though unemployment is still above 9 percent, the investment climate may be improving. The Dow Jones Industrial Average climbed above 12,000 Wednesday for the first time since June 2008. A recent Bloomberg Global Poll found that investors mostly picked the United States as the best place to put their money -- in the survey of 1,000 investors and analysts, China and Brazil trailed the United States, while the European Union was generally seen as the worst market.
{{#rendered}} {{/rendered}}But Turner said Americans are increasingly concerned about the "long-term" implications of government intervention. He cited the Wall Street and auto bailouts -- as well as federal intervention in the pension plans for retired workers from auto parts company Delphi Corporation in his Ohio district -- as the impetus for his proposal.
"The most effective method to prevent government intrusion and manipulation of the private sector is through this constitutional amendment," Turner said in a written statement.
In order for a constitutional amendment to be approved, it has to pass both chambers of Congress with at least a two-thirds majority. Then it has to be ratified by at least three-quarters of the state governments.