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The Best $25 Billion Obama Ever Borrowed (Politically) The Best $25 Billion Obama Ever Borrowed (Politically)

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Campaign 2012

The Best $25 Billion Obama Ever Borrowed (Politically)

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President Barack Obama tours Chrysler Groupís Toledo Supplier Park in Toledo, Ohio.(AP Photo/Charles Dharapak)

Democrats call it a rescue. Republicans call it a bailout. However you prefer to describe president Obama’s decision to pump money into General Motors and Chrysler at a time of severe financial duress, one thing is clear: It is proving to be the most politically important economic policy Obama implemented.

The Treasury Department projects that taxpayers will end up paying about $25 billion on net for the auto assistance. In the final days of an exceedingly tight reelection campaign against Republican Mitt Romney, that $25 billion decision is looming much larger for Obama than his signature $800 billion stimulus bill.

 

Because of Ohio.

There’s no indication politics were on Obama’s mind, or that of his aides, when he decided in 2010 to offer GM and Chrysler an $85 billion lifeline — about $60 billion of which has been or is projected to be recouped. The money was aimed at preventing an auto supply-chain collapse across the Rust Belt, and the administration was attempting to sav about 1 million jobs, in the estimation of the nonpartisan Center for Automotive Research.

Fast forward to election eve and the political force of that assistance is clear. Despite running neck-and-neck with Romney nationally and across swing states such as Colorado and Virginia, Obama continues to hold a small but meaningful lead in Ohio in most public polls. If he keeps that lead on Election Day, Ohio could put him over the top for a second term. Many political operatives say that the auto assistance has made all the difference for Obama in the Buckeye State and its auto-production-heavy neighbors.

 

Rust Belt voters connect with the auto assistance in ways they did not connect with the larger stimulus. It is more targeted — to one, iconic industry that a particular region has long considered its economic lifeblood — and as a result, its effects feel more tangible to voters there.

“If one lives in Oklahoma City or Boise, Idaho, or Denver, Colorado, you may not envision what (an auto industry) collapse would look like for your way of life,” said Chris Redfern, the chairman of the Ohio Democratic Party. “But if you live in Ohio, Pennsylvania, Michigan … across the Midwest, it would have had a devastating impact on economies.”

Some Republicans downplay the impact. Mark Weaver, a GOP consultant based in Columbus, said, “There’s a small slice of voters in Ohio who will forever be grateful to Barack Obama for championing the auto bailout. But it’s a very small slice” — and likely canceled out by blue-collar voters in southern Ohio who have turned against Obama over his regulation of coal-fired power plants, he said.

Romney’s campaign clearly views the rescue/bailout as critical: Their final-hour advertising campaign in Ohio features radio and television spots criticizing Obama’s auto policy and implying, misleadingly, that GM is shifting production of Jeeps — the manufacturing pride of Toledo — to China. GM executives have criticized the ads and said they will not shift any production from the United States to China.

 

Obama might expect a new round of auto-related criticism if he holds on in Ohio and ekes out an electoral college win — especially if he loses swing states outside the Midwest, and/or the popular vote. In that case, the GOP might accuse the president of buying a second term with taxpayer dollars. Twenty-five billion of them, more or less.

 

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