THe House GOP leadership Wednesday released an alternative plan to the Democrats' proposed $15 billion in loans to the auto makers. The plan is reminiscent of an loan-insurance-themed proposal that House Republicans pushed hard during the financial bailout debate. The plan would be industry funded.
During the financial debate, critics argued that the banks didn't have the capital to fund the insurance plan. It's likely that automakers would also claim they don't have the cash to fund the insurance program. Indeed, GM has said it might not have enough cash to continue operating for more than a few weeks.
"Rather than a taxpayer-funded government bailout that replaces private investment,," explains a leadership memo, "the House GOP plan proposes that the government provide insurance, funded by the participants with a modest FDIC-like fee, which would cover up to 50 percent of the losses of new investment in the case of default, helping to unlock immediate private investment."
The outline of the plan, and a statement from Minority Leader John Boehner (R-Ohio), after the jump...
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