Democratic debate: Background on the auto bailout
At Sunday night's debate in Flint, Michigan, Democratic candidates Hillary Clinton and Bernie Sanders tussled over their positions on the 2008-09 auto bailout -- a key issue in Michigan, where the auto industry is a huge provider of jobs.
Clinton brought up Sanders's vote against the federal bailout program, saying he opposed the money that "ended up saving the auto industry."
"In January of 2009, president-elect Obama asked everybody in the Congress to vote for the bailout. The money was there and had to be released in order to save the American auto industry and four million jobs and to begin the restructuring," Clinton said. "We had the best year that the auto industry had in a long time. I voted to save the auto industry. [Sanders] voted against the money that ended up saving the auto industry. I think that is a pretty big difference."
Sanders fired back, saying his opposition to the bailout was based on not wanting to fund Wall Street executives.
"Did I vote against the bailout when billionaires destroyed this economy, they went to Congress and they said please, we will be good boys, bail us out?" Sanders said. "You know what I said? I said let the billionaires themselves bail out Wall Street. It shouldn't be the middle class of this country."
Here's some quick background about the situation: the Auto Industry Financing Program, part of the Troubled Asset Relief Program (TARP) or the $700 billion federal bailout, began when the auto industry asked Congress in fall 2008 for $50 billion to avoid going bankrupt.
The money was eventually disbursed in early 2009, shortly after President Obama took office. The federal government took over General Motors and Chrysler in March 2009.
All told, the U.S. government spent approximately $80 billion bailing out the auto industry. The bailout was finally complete in December 2014, when the Treasury Department finally sold off the last of its shares of Ally Financial, the last big recipient of federal funds under the program.
Back during the 2012 race, the auto bailout played a big role in the campaign between Obama and Republican nominee Mitt Romney. Romney had authored an op-ed titled "Let Detroit Go Bankrupt" -- a headline the candidate himself did not write (though he did argue for a managed bankruptcy that would enable automakers to restructure), but that proved to be a major weakness for him in states with a big auto industry presence, like Michigan and Ohio.
