Mitt Romney massaged his position on the auto rescue in an interview with the Detroit News on Tuesday, saying that he might have given the auto companies unspecified “support” to get them out of bankruptcy. But, as has often been the case when the bailout is concerned, it was unclear exactly what he meant.
Romney said that Democrats were “distorting” his position by saying he would have let the major auto companies go under, arguing that he merely thought they should go through bankruptcy first before receiving government aid. Industry experts have insisted that tens of billions of dollars of federal loans in 2008 and 2009 were absolutely necessary as a prerequisite for an orderly bankruptcy that prevented them from being liquidated, since help from private firms was completely out of the question during the financial crisis.
“If they needed help coming out of bankruptcy and government support, that was fine, but I was not in favor of the government writing billions of dollars in checks prior to them going into bankruptcy,” Romney said.
Some news outlets took this to be a new position, one that indicated Romney had come around to the Obama and Bush administration’s insistence that the companies needed serious government cash to get on their feet. In fact, he said something similar in 2012, before his campaign clarified that nothing had changed. A spokeswoman for Romney, Andrea Saul, again told TPM that he had not altered his stance in his most recent interview, but there did seem to be signs of a shift this time around.
His position is the “same thing he said in the op-ed,” Saul said, referring to his 2008 New York Times piece, “Let Detroit Go Bankrupt.” That piece suggested that the “federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk,” but policymakers across party lines say that such steps were insufficient to tackle the problem and that emergency federal loans were the only way the industry could find enough capital to fund its successful turnaround.
“There was no one that could have picked up those pieces other than the federal government,” Romney backer and bailout supporter Rep. Fred Upton (R-MI) told reporters in February even as he barnstormed the state for the presumptive nominee.
However, Romney’s camp clarified to TPM that the governor believed private firms could have been enticed to provide debtor-in-possession financing if the federal government had guaranteed them against losses. These guarantees would be provided only after the auto companies declared bankruptcy, but the goal would be to make the money available before they emerged from bankruptcy.
It’s the closest he’s come to suggesting taxpayer funds on a large scale may have been necessary even during a private sector bankruptcy. Steve Rattner, the former Obama adviser who oversaw the rescue and a strong critic of Romney on the issue, said this latest description undercut Romney’s previously stated opposition to bailouts and put him closer to the White House’s position.
“Romney would fail a first year finance class at Harvard Business School,” Rattner told TPM. “There is absolutely no difference between the government guaranteeing loans (DIP or otherwise) and just lending the money directly, as Presidents Bush and Obama did.”
Sen. Carl Levin (D-MI), in a statement released through the Obama campaign, accused Romney of trying to “Etch-a-Sketch” his old position.
“Mitt Romney’s latest tortured defense of his call to ‘Let Detroit go bankrupt’ is even more outlandish than the last ten times he tried to explain why he turned his back on Michigan,” he said. “The simple fact is that GM and Chrysler would never have survived long enough to undergo a private bankruptcy without the federal rescue loans. Mitt Romney knows he was wrong, and now that the auto industry is coming back and creating jobs, his attempts to rewrite history are getting more desperate every day.”
Romney’s take on the 2008 and 2009 auto bailout has sometimes resembled quantum physics more than public policy, seemingly shifting in tone from interview to interview without ever settling on a clear, definitive position. In 2009, for example, he claimed that Obama had followed his advice by putting the companies through a managed bankruptcy, but stayed silent on the billions of taxpayer dollars that were committed to make sure the companies survived the process. In 2011 he again insisted — against all evidence — that private finance firms could have provided the funds to make it work.
Earlier this year, Romney was again forced to address his vague stance in more detail, especially during the Michigan primaries, but he’s continued to leave much of his position to the imagination. Recently, he’s tried to blur the lines between his and Obama’s approach, saying that he favored the same bankruptcy process as the White House without ever embracing the funding that made it happen. Tuesday’s interview seems to put him a step closer to taking that final plunge, albeit more than three years after the initial auto bailout.
This post has been updated.
Benjy Sarlin is a reporter for Talking Points Memo and co-writes the campaign blog, TPM2012. He previously reported for The Daily Beast/Newsweek as their Washington Correspondent and covered local politics for the New York Sun.