Bernie Sanders supported the auto industry bailout, but he did a horrible job explaining that in his debate with Hillary Clinton Sunday night.
Clinton was right when she said, “He voted against the money that ended up saving the auto industry.”
But here’s the catch: The funding that Sanders voted down was earmarked to bail out the banks.
General Motors and Chrysler were actually bailed out using money from TARP, the $700 billion bank bailout that passed during the financial crisis in the fall of 2008. When it was originally proposed, there were no plans to use the money to save the auto industry.
The fact that Sanders voted against TARP gave Clinton the ability to say, “If everybody had voted the way he did, I believe the auto industry would have collapsed, taking four million jobs with it.”
President Bush asked Congress to authorize a bailout for the auto industry in December of 2008. It had the support of a majority of the Senate, including Sanders and Clinton. But Republican opposition blocked it from passing.
So when it came time to give the automakers the money, first Bush and then Obama simply tapped into TARP.
Sanders first opposed TARP when it passed in October 2008. He also joined with Republicans who sought to stop the distribution of TARP funds in January 2009, at which point it had been determined that some TARP funds would go to the auto bailout. But that effort failed, and the auto-industry rescue became part of TARP.
“In terms of the auto bailout, of course that made sense…and I strongly supported President Obama’s position on that,” Sanders said in Flint, Mich.. He said he would have funded an auto bailout out of the stimulus package, rather than TARP.
Then he pivoted to attack Clinton on the Wall Street bailout.
“I believe that the recklessness, the greed, and the illegal behavior of Wall Street drove this country into the worst economic downturn in the modern history of the United States of America,” he said “And I will be damned if it was the working people of this country who had to bail out the crooks on Wall Street.”
Clinton made her support for the auto bailout the center of a radio ad in Michigan that started airing Monday morning. It uses a clip from the debate in which she said, “When it came down to it, you were either for saving the auto industry or you were against it. I voted to save the auto industry.”
While the auto bailout is popular in Michigan, the Wall Street bailout is still very unpopular with voters there and nationwide, even though U.S. taxpayers made a profit on that bailout.
The auto bailout was one of the few parts of TARP in which taxpayers lost money, although the federal budget would have taken a far worse hit if GM and Chrysler had gone out of business.
Correction: An earlier version of this story incorrectly stated how much money was authorized for TARP.