Bush: TARP Funds Could Save Detroit

President George W. Bush today issued a new statement related to the domestic automotive industry, informing that a potential solution to rescue the almost-collapsed Detroit 3 would be the use of TARP funds until the Senate reconsiders the initial loan request. The White House motivated its statement by pointing to the effects a potential bankruptcy of the automotive industry could produce, explaining that the United States would not afford to destabilize the economy at this time.

While Ford Motor said it could resist without government aid for a few more months, General Motors and Chryler LLC admitted that bankruptcy would remain their only option in case their loan request doesn't get through the Senate.

Although the TARP (Troubled Asset Relief Program) funds shouldn't be used for the domestic automotive industry, Senate's recently decision may allow the current administration to help the carmakers using the aforementioned financial resources, Detroit Free Press wrote today.

“A precipitous collapse of this industry would have a severe impact on our economy and it would be irresponsible to further weaken and destablize our economy at this time,” White House press secretary Dana Perino commented on the possibility to the TARP funds in this matter.

"Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry," Treasury spokeswoman Brookly McLaughlin, added.

But beside all these facts, getting money from TARP could infringe World Trade Organization rules, with the European Union likely to supervise any potential agreement it may take place. "We will be very closely observing what is in their plan," European Commission spokesman Peter Power told the Dow Jones Newswires.