Senate Republicans kill auto bailout bill

Reporting from Washington — Republican opposition killed a $14-billion auto industry bailout plan in the Senate on Thursday night, putting the future of U.S. automakers in doubt and threatening to deliver another blow to the economy.

The measure died after a last-ditch effort by Senate Democratic leaders to strike a compromise that would have lured enough support to save the legislation, which was crafted in consultation with the White House.

The bill's failure raises the possibility of bankruptcy by one or more of Detroit's Big Three and puts new pressure on President Bush to authorize emergency loans for the automakers from the $700 billion Wall Street rescue fund -- a step he has adamantly refused to take.

The collapse of General Motors, Chrysler or Ford -- along with many of their suppliers and dealers -- could throw hundreds of thousands more workers onto the growing unemployment rolls and further cloud the closing days of the Bush administration.

"We will leave here tonight to go home for the holiday recesses, but for the literally hundreds of thousands of people whose jobs depend on this industry, this will not be a joyous season, wondering whether or not their jobs, their livelihoods, their homes, their children's futures are at risk," said Senate Banking Committee Chairman Christopher Dodd (D-Conn.)

White House spokesman Tony Fratto said the Bush administration was disappointed by the bill's failure and left the door open to the president taking action to provide funding.

"We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers, and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable," Fratto said. "We will evaluate our options in light of the breakdown in Congress."

After the vote, GM issued a statement saying it was "deeply disappointed" that a deal could not be reached. "We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis," spokesman Tony Cervone said. Ford and Chrysler had no immediate comment.

The bill would have provided emergency loans to GM and Chrysler and pressured them to restructure under a new monitor, or "car czar," appointed by the president. The money would have been taken from an existing $25-billion fund intended to help automakers retool their factories to make more fuel-efficient cars.