Alexander Introduces “Auto Stock for Every Taxpayer Act”

June 4th, 2009 - WASHINGTON - U.S. Senator Lamar Alexander (R-Tenn.), chairman of the Senate Republican Conference, said today during a press conference that he is introducing legislation today to require the Treasury to distribute to individual taxpayers all its stock in General Motors (GM) and Chrysler within one year following the emergence of the companies from bankruptcy proceedings.”

“Instead of the Treasury owning 60 percent of shares in the new GM and 8 percent of Chrysler, you would own them, if you were one of about 120 million individuals who paid taxes on April 15,” Alexander explained. “This is the fastest way to get the stock out of the hands of Washington and back into the hands of the American people in the marketplace where it belongs. The stock certificates would be in your name, not that of your government.”

Alexander said that Fritz Henderson, President and CEO of GM, told senators and congressmen in a telephone call this week that while it is the Treasury’s decision to make, that this is a “very large amount” of stock, and that the orderly offering of those shares to establish a market might have to be “managed down over a period of years.”

“Those shares might not be worth much at first,” Alexander continued, “but put them away and one day they might contribute something toward a college education.”

Alexander expressed concerns about “what government ownership of car companies will look like,” pointing out that “there are at least 60 Congressional committees and subcommittees authorized to hold hearings on auto companies and most of them will, probably many times.

“You can just imagine the questions. About what the next model should look like. About which plant should be closed. How many cars should have flex fuel? What the work rules and the salaries ought to be? Where the conferences could and could not be held?

“The other day, a visiting European automobile executive said to me with a laugh that he had come to “the new American automotive capital: Washington, D.C.” To get our economy moving again, let’s get our auto companies out of the hands of Washington and back into the marketplace – the sooner the better.”

The Auto Stock for Every Taxpayer Act, which has been filed as an amendment to the FDA-Tobacco regulation bill, would:

• Prohibit the Treasury from using any more TARP funds to bailout GM or Chrysler.
• So long as the government holds stock in these companies, require that the Secretary of the Treasury and his designee have a fiduciary responsibility to the American taxpayer to maximize the return on that investment.
• Not later than one year after each company emerges from bankruptcy, require that the Treasury distribute its common stock holdings in that company evenly to every American who paid taxes on April 15.