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Car Talk

- December 11, 2008

Gentlemen [sic], start your engines! It’s time to take out those congressional bailout vote models. As a bill to rescue the nation’s domestic automobile industry sputters across Capitol Hill this week, let’s make a pit stop and peek under the hood of the House coalition. Who pushed that speedily-crafted legislative jalopy over the finish line?

Similar to the $700 billion bailout package enacted this past October (as Mark Spindel and I blogged about here and here), Democrats provided the majority of the yea votes– but depended on Republicans to secure final passage (237-170). The vote fell largely, though not strictly, along party lines: Over ninety percent of Democrats voted yea; over eighty percent of Republicans, nay. The twenty Democratic defectors all hailed from the right of the Democratic Caucus, with the exception of two California liberals joining their more conservative colleagues. Three-fifths of the Democratic defectors also bailed on the October bailout bill—giving them bragging rights as the low scorers on our sure-to-grow Bailout Propensity Index.

And which Republicans were most likely to support pumping emergency loans into the Big Three? Location, location, location. All of the eight Michigan Republicans who participated in the vote supported the bailout. Indeed, Republicans from Rustbelt states were disproportionately (though not surprisingly) more likely to vote with the auto manufacturers, even controlling for ideological predispositions. Republican moderates were also more likely to cross the double yellow line to vote with the Democrats, just as they were for the Wall Street bailout package in October. Granted, Republicans from Rustbelt states tend to be more moderate than their Republican colleagues. But both ideology and geography tend to matter in driving GOP support. Finally, even after controlling for policy views and constituency forces, retiring Republicans were more likely to vote with Motown. Single-minded seekers of re-election can quickly become single-minded seekers of saving their 401K’s.

What lesson should the Big Three draw from the House vote as they seek roughly a dozen GOP votes to break Senator Richard Shelby’s promised Senate filibuster? Fill your tanks and buckle up for a bumpy ride. The geographic concentration of the domestic auto industry in the Rustbelt radically limits the industry’s voting power in the Senate. Nor has the spread of foreign automakers in search of lower labor costs into the South helped the Big Three’s cause, as southern senators—already ideologically predisposed to shun direct government support for the auto industry—seem unswayed by the potential for a heavily-unionized domestic industry in the Midwest to go bankrupt. And unfortunate for the Big Three, few of the remaining Senate GOP moderates yet appear to be on board for the bailout package.

In short, the search for Republican votes is running out of gas, portending ill for the immediate future of the Big Three. Unfortunately for the local and regional economies that now depend on the continued existence of a domestic auto industry, there do not seem to be any good detours available for avoiding a long drive into and out of bankruptcy court. And unfortunately for the rest of us, a failure of the bailout bill will likely have severe consequences for the health and stability of an already tanked economy. More than the Big Three will likely stall out if and when the Senate defeats the bailout.