President Obama is hoping to change voters’ views of his controversial bailout of the auto industry and turn his own political liability against Republicans amid signs that U.S. automakers are rebounding. At the height of the bailout rage — when the government pumped billions of dollars into General Motors and Chrysler despite a Republican outcry — it would have been difficult for liberals to craft a winning political message defending big-government spending.
But now that Chrysler has repaid its $5.1 billion loans six years early, Obama is traveling to one of the company’s plants in the battleground state of Ohio this week to make the case that the bailout was good for the auto industry and the ailing American economy.
For the White House, the improving auto industry offers an opportunity to rebrand massive government spending and the president’s agenda in a positive light. Administration officials see the effort as a cornerstone of the president’s re-election bid, particularly in the Rust Belt and other states with deep stakes in the auto industry.
“Supporting the American auto industry required making some tough decisions, but I was not willing to walk away from the workers at Chrysler and the communities that rely on this iconic American company,” Obama said in hailing the repayment of the multibillion-dollar loan.
Some analysts, however, said that could be a tough sell for the White House.
“I doubt the administration will be able to change impressions of the auto bailout,” said Karlyn Bowman, a senior fellow at the American Enterprise Institute, who analyzes public opinion. “[Views] about the administration’s decision were very hard and strongly against [the auto bailout], and first impressions like these are hard to shake.”
The dilemma for Obama: Regardless of any advances in the industry, a significant segment of the American public will fundamentally detest the bailout for philosophical reasons, convinced that it was patently unfair to prop up major corporations amid widespread unemployment.
Obama is banking that the successful bailout will help him in several swing states, including Michigan, Ohio and Pennsylvania, where voters are more dependent on the auto industry for their livelihood.
The Democratic National Committee and governors in Midwest have rallied behind the president’s message, declaring that if Republicans had gotten their way on the bailout, the American auto industry would be just a shell of itself — and hundreds of thousands of jobs would have been lost in the process.
Critics counter that Obama is overplaying his political hand, noting the government still owns 6.6 percent of Chrysler and will likely never recover $2 billion inaid left behind in the earliest stages of taxpayer support.
For their part, GOP presidential candidates are standing behind their criticism of the bailout package. One of them, former Massachusetts Gov. Mitt Romney, said that billions in taxpayer dollars would not have been put at risk if the auto companies simply entered bankruptcy.
The Obama administration, though, is undaunted.
“We faced an auto industry on the brink of extinction — total collapse,” said Vice President Biden. “At the time, many people thought the president should just let GM and Chrysler go under. They didn’t think the automobile industry was essential to America’s future. Because of what we did, the auto industry is rising again.”
