In late breaking news, Treasury Secretary Paulson has announced a new plan to expand TARP coverage.

Congress was behind the push as Pelosi, Reid Press for TARP Aid for Auto Industry.

House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid sent to send a letter to Treasury Secretary Henry Paulson urging him to assist the Big Three auto makers by considering broadening the $700 billion Troubled Asset Relief Program to help the troubled industry.

The two top Democratic leaders in Congress are likely to make the request in a letter to the White House, which could be forwarded as soon as Saturday afternoon, said individuals familiar with the matter. President-elect Barack Obama is generally supportive of the appeal, but at the moment is moving on his own track to assist the industry, these individuals said.

Mr. Obama is scheduled to meet with President George W. Bush at the White House Monday.

Though the administration is reluctant to widen the program to cover autos, there has been discussion among Bush officials of expanding use of the $700 billion to buy equity stakes in a range of financial-sector companies, moving beyond just banks and insurers. The focus would be on assisting companies that provide financing to the broad economy, such as bond insurers and specialty finance firms such as General Electric Co.’s GE Capital unit, CIT Group Inc. and others, individuals familiar with the matter said.

Auto Makers Would Accept Strings on Aid

Competition to get under TARP coverage is so high that Auto Makers Would Accept Strings on Aid.

The heads of Detroit’s three auto makers and the United Auto Workers union pleaded Thursday with Democratic congressional leaders to rush more government aid to their foundering companies, offering to accept conditions such as granting stock warrants to the government in return for capital, a person familiar with the discussions said.

President-elect Barack Obama and some other Democrats have expressed support for proposals to double to $50 billion a previously authorized government-loan program aimed at helping Detroit’s unionized auto makers retool to build more efficient cars.

Mrs. Pelosi, in an interview Thursday before the meeting, suggested the government assistance should be tied to moves to improve fuel efficiency. “I don’t think you’ll see much interest” if aid goes toward “doing things the old way,” she told The Wall Street Journal.

New Way Of Doing Business

In keeping with Pelosi’s spirit of a “New Way Of Doing Business”, GM Opens $300 Million Russian Plant to Boost Sales.

General Motors Corp., the world’s biggest carmaker, opened a $300 million factory in Russia as it looks to compensate for slumping sales in western Europe and North America.

The plant in the Shushary district on the outskirts of St. Petersburg will produce 70,000 Chevrolet Captiva sport-utility vehicles and the Opel Astra, with plans to manufacture the Chevrolet Cruze compact car next year.

“Our strategy is to become the leading manufacturer in Russia,” Carl-Peter Forster, GM’s chief for Europe, told reporters during the plant opening today. “For us Russia is not an emerging market. Russia emerged long ago.”

So instead of losing jobs to Mexico, China, and India, GM’s “New Way Of Doing Business” will be to lose jobs to Russia. I am quite sure the Treasury and House Speaker Pelosi will be excited by this development.

Details Of New Tarp Plan Emerge

Details of the exact nature of the new treasury plan were kept under wraps, but photographer Keith Taylor managed to sneak into the “Situation Room” and capture this stunning image of exactly who would be covered under the new TARP initiative.

News is sometimes so bizarre now that it is hard to tell fact from fiction. Only the headline, the first sentence and the image above are not real news …. at least not yet.

Mike “Mish” Shedlock
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