Debate: Obama’s Auto-Bailout Whopper

The Boca Raton Bout was focused on foreign policy, but one subplot was of particular interest to Michigan’s economy: President Obama’s whopper on the auto bailout. For the first time, the two candidates went head-to-head on the Government Motors details — and Obama got it wrong. Badly wrong. Damn-the-facts-I’m-clinging-to-my-talking-points wrong.

For the record, Mitt Romney has always suggested that he favored a managed bankruptcy with government support if needed (a fact that grates on many libertarian-minded conservatives) — despite Obama & Associated Press attempts to twist the facts.

“The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk,” wrote Romney in a 2008 New York Times op-ed. He has expanded on this view in numerous interviews with this writer and others — perhaps most explicitly in an interview with our Detroit News editorial board in February:

“I would never have allowed the auto industry to disappear,” he said then, adding that — at a time when capital markets were frozen — “if government financing was needed, fine. In a managed bankruptcy process, government could have provided guarantees, financing, and DIP financing.”

Yet, Obama insisted in the debate on his “Let Detroit go bankrupt” caricature. The exchange is devastating to Obama’s veracity:

ROMNEY: The president mentioned the auto industry and that somehow I would be in favor of jobs being elsewhere. Nothing could be further from the truth. . . . I said they need – these companies need to go through a managed bankruptcy, and in that process they can get government help and government guarantees, but they need to go through bankruptcy to get rid of excess cost and the debt burden that they’d – they’d built up.

OBAMA: Governor Romney, that’s not what you said.

MR. ROMNEY: Fortunately, the president – you can take – you can take a look at the op-ed.

PRESIDENT OBAMA: Governor, you did not –

MR. ROMNEY: You can take a look at the op-ed.

PRESIDENT OBAMA: You did not say that you would provide, Governor, help.

MR. ROMNEY: I said that we would provide guarantees and – and that was what was able to allow these companies to go through bankruptcy, to come out of bankruptcy. Under no circumstances would I do anything other than to help this industry get on its feet. And the idea that has been suggested that I would liquidate the industry – of course not. Of course not.

PRESIDENT OBAMA: Let’s check the record.

But this time, Candy Crowley didn’t come to Obama’s rescue by butchering the record. The record clearly shows Romney is right. And Obama is fibbing.

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