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Congress vows short leash on auto bankruptcies

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June 4, 2009

Congress will closely monitor the role played by the federal government during its management of insolvent auto giants General Motors and Chrysler, a top House Democrat said Wednesday.

"Obviously the committees of jurisdiction will be exercising oversight," said Democratic Majority Leader Steny Hoyer, at a press conference.

Noting that there is no single Congressional panel tasked with issues related to the automotive industry, Hoyer said key oversight roles would be played by committees on Financial Services, Education, Labor, Energy, Commerce, and Ways and Means, which handles federal taxation matters.

The Democratic leader echoed President Barack Obama’s view that "it clearly is not the intent of the administration to engage in day-to-day operations of the automobile companies."

The US government has taken a 60 percent stake in General Motors, which sought bankruptcy protection on Monday.

GM aims to emerge from bankruptcy protection as a leaner company within 60 to 90 days and has obtained an additional 30 billion dollars from the US Treasury to fund its restructuring.

Chrysler, the third-biggest US automaker, also has declared bankruptcy and is seeking a tie-up with Fiat backed by US and Canadian government financing to avoid liquidation.