House Republicans stand up for GM bondholders

The war on capital continues, but at least there are a few republicans who recognize it and are trying to do something about it. Reps Eric Cantor, Mike Pence, Pete Sessions and Jeb Hensarling are calling out the Obama administration for thwarting the rule of law with its handling of General Motors.

WASHINGTON, May 22 (Reuters) – Four U.S. Republican lawmakers have complained to Treasury Secretary Timothy Geithner that a plan to restructure automaker General Motors Corp (GM.N) subverts the rights of bondholders, according to a letter from the lawmakers obtained by Reuters on Friday

A proposed restructuring favors the claims of the United Auto Workers union “over the rights and claims of the company’s diverse group of bondholders, who collectively hold $7 billion more in General Motors debt than the UAW’s health trust and are equal members of the creditor class,” the lawmakers said.

“Bondholders must have a seat at the table during negotiations in how the company would be restructured,” said the letter to Geithner from Representatives Jeb Hensarling, Eric Cantor, Mike Pence and Pete Sessions.

“We are extremely concerned that in the name of restructuring General Motors, the Presidential Task Force on the Auto Industry … has begun waging what some believe amounts to a war on capital: contractual rights of investors are being trampled by the government under the rationale of ‘extraordinary circumstances,’” the lawmakers wrote.

I’m sure their complaints will fall on deaf ears. But at least someone’s bringing attention to the fact that the Obama administration is not acting within the law. What kind of nation are we when contracts can be ripped up by politicians? They’re job is to uphold the Constitution of the United States of America, not the UAW.

If you believe these bondholders are rich fat cats, you’re wrong. Not only are pensions for teachers and firefighters getting the shaft, so are ordinary Americans who invested their retirement savings in what they believed were secure bonds.

So much for looking out for the little guy.

This entry was posted on Friday, May 22nd, 2009 at 2:13 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed.