Democrats back stopgap bailout for automakers
The $14-billion compromise requires buy-in from GOP lawmakers and the White House.
Reporting from Washington — Moving to keep the auto industry from collapse, congressional Democratic leaders agreed late Friday to a stop-gap compromise that would provide $14 billion in aid by diverting money from an existing fund that was supposed to help automakers make more fuel-efficient cars, according to senior aides.
The measure still needs support from some Republicans to get through the Senate, as well as White House approval. But President Bush has already come out in favor of using money from the Energy Department's $25-billion advanced technology fund to help the car companies and reiterated that point Friday in urging Congress to act quickly.
House Speaker Nancy Pelosi (D-San Francisco) had strongly resisted using money from the technology fund but changed her mind after the government reported early Friday that 533,000 workers lost their jobs in November -- the worst monthly decline in 34 years.
Pelosi's turnabout could be the key to keeping General Motors Corp. and Chrysler from running out of cash until March 31. (Ford Motor Co., which is on better financial footing, says it needs only a line of credit). But congressional aides cautioned that there were still details to be worked out. That includes getting a commitment from the White House to quickly replenish the energy fund, aides said.
"Congress is considering various short-term funding options for the American automobile industry," Pelosi said Friday night. "We will not permit any funds to be borrowed from the advanced technology program unless there is a guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative. Regardless of the source, all funding needs will be tightly targeted with vigorous supervision and guaranteed taxpayer protection."
White House spokesman Tony Fratto said administration officials continued to talk with Congress and hoped to make progress this weekend. If a deal is finalized, Congress could vote early next week.
A deal to quickly provide a $14-billion bridge loan would avert the danger of imminent bankruptcy by GM or Chrysler, and possibly the failure of Ford, which relies on many of the same suppliers. It would also buy time for Congress to consider the industry's future more carefully and for President-elect Barack Obama to take office.
