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Detroit Gets A Bailout, Too

It's stunning that $25 billion is no longer considered a lot of money for Congress to fork over to corporate America, but the House just approved $25 billion worth of low-interest loans to Ford, GM, and Chrysler, along with some of their suppliers. Okay, in fairness, this had been authorized in last year's energy bill, but, it's still noteworthy that there aren't many strings attached to the loans. When Chrysler got a (smaller) federal handout back in 1979, the company was required to develop an "energy savings plan." By contrast, the Big Three are just supposed to retool their assembly lines and invest in fuel-efficient technologies—things they've already been doing, thanks to high gas prices.

According to Rick Newman of US News & World Report, these are probably just the first few loose pebbles of a landslide, and the Big Three will almost surely be back for more next year. Now, there's ample reason to be skeptical of these loans—see David Leonhardt for reasons to think that the 1979 Chrysler bailout was a blunder in retrospect—but seeing as how Michigan's an all-powerful swing state and, realistically, Detroit is going to get some sort of help no matter what, couldn't Congress at least be more creative? Obama, for instance, has touted a health-care-for-hybrids plan, where the government would take over some of the Big Three's retiree health costs (which have dragged U.S. automakers down, though probably not as much as their gamble on gas-guzzlers), while carmakers would invest the savings in fuel-efficient vehicles and hybrid design. Not sure that's an ideal solution, but shouldn't something like that be in the mix?

--Bradford Plumer