In Michigan, Hillary Clinton says Bernie Sanders 'was against the auto bailout'

Sen. Bernie Sanders didn’t support the bailout that saved the auto industry, Democratic presidential candidate Hillary Clinton said of her opponent ahead of the primary in Michigan, a state built on the auto business.

"He was against the auto bailout," Clinton said at a March 6 CNN debate in Flint, Mich. "In January of 2009, President-elect Obama asked everybody in the Congress to vote for the bailout. The money was there and had to be released in order to save the American auto industry and 4 million jobs and to begin the restructuring. We had the best year that the auto industry has had in a long time. I voted to save the auto industry. He voted against the money that ended up saving the auto industry."

Sanders seemed skeptical of this line of critique.

"Well, if you are talking about the Wall Street bailout, where some of your friends destroyed this economy," he responded.

Immediately a bunch of readers asked us to look into this claim to see if Sanders really did oppose the auto bailout, which many people believe rescued major automakers struggling to stay afloat during the 2008 Great Recession.

First we’ll lay out the auto bailout timeline, then we’ll explain Sanders’ votes. Basically, Sanders had two opportunities to show his support for auto bailout funds through Senate votes. He supported the bailout in one instance but not the other.

In October 2008, Congress approved the $700 billion Troubled Asset Relief Program (TARP). The money was intended to assist financial institutions, but it also ended up bailing out the auto industry.

That December, Congress tried to pass a separate $14 billion bailout program specifically for the auto industry, which was in really bad shape. But the measure failed in the Senate, so President George W. Bush instead used his authority to allocate some of the TARP funds to General Motors and Chrysler.

Just days before President Barack Obama started his first term in January 2009, some members of Congress tried to block the release of the the second half of the $700 billion TARP funds, a package that included some auto bailout money. The attempt failed, and the TARP funds went out to the banks and motor companies.

So Sanders could have shown his support for the auto bailout in December 2008 when Congress tried and failed to pass an auto bailout and again in January 2009 when members considered blocking TARP funds.

Sanders (and Clinton, too) voted in favor of the December separate auto bailout.

"I think it would be a terrible idea to add millions more to the unemployment rolls," Sanders said, according to Vermont Public Radio, explaining why he supported the measure.

However — and this is what Clinton is talking about — Sanders voted to block the release of the second half of the TARP funding, including the auto bailout funds, while Clinton voted for the funds. (Sanders opposed and Clinton supported the initial TARP bill.)

Sanders said he opposed bailout funding for financial firms, which is where the majority of TARP dollars were headed.

"I have strong reservations about continuing this bailout without strong taxpayer protections written into law," he said in a statement. "I also object to using middle-class taxpayer money to bail out the exact same financial institutions whose greed and recklessness led to the greatest financial crisis since the Great Depression."

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It’s unclear how much of the second half of TARP funds Obama intended to use for the auto bailout at the time. In a letter to congressional leaders encouraging them to release the funds, Obama economic adviser Larry Summers said only that auto companies would "only receive additional assistance in the context of a comprehensive restructuring designed to achieve long-term viability."

Both of Michigan’s then-senators, Democrats Debbie Stabenow and Carl Levin, advocated to continue TARP funding specifically to aid the auto industry, which has a heavy presence in their home state.

Auto companies ended up receiving about about $85 billion in TARP funds, according to the New York Times. It’s possible the auto industry would not have received such a robust bailout if Congress had successfully blocked the second half of the TARP funds and withstood an Obama veto.

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Our ruling

Clinton said Sanders "was against the auto bailout" and "voted against the money that ended up saving the auto industry."

Sanders did vote against a set of funds that financed most of the auto bailout — though the funds’ primary purpose was bailing out Wall Street firms, which Sanders strongly opposed.

The claim, though, leaves listeners with the impression that Sanders’ opposed bailing out the auto industry. But he voted in favor of providing auto companies with $14 billion, which was separate from the Wall Street bailout funds he opposed. That standalone measure failed.

We rate Clinton’s claim Half True.