In the latest sign of pressure to help teetering U.S. automakers, the Michigan congressional delegation wrote to Treasury Secretary Henry M. Paulson on Monday urging him to authorize "emergency assistance" for the domestic auto industry.
Over the weekend, House Speaker Nancy Pelosi (D-San Francisco) and Senate Majority Leader Harry Reid (D-Nevada) also wrote to Paulson, asking him to review the terms of the rescue legislation to determine whether automakers qualify.
"A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy and the livelihood of the automobile sector's workforce," they wrote.
Congress had authorized up to $25 billion in government-backed loans for automakers, but with General Motors Corp., Chrysler and Ford Motor Co. weakened by the economic crisis, industry leaders and lawmakers are calling for much more help.
President-elect Barack Obama said Friday that the industry is "the backbone of American manufacturing" and its troubles affect "countless suppliers, small businesses and communities throughout our nation."
Senate leader Reid believes the $700-billion financial rescue legislation is worded broadly enough to allow help for automakers, spokesman Jim Manley said. Sen. Carl Levin (D-Mich.) said Saturday that in case the Treasury Department rejected that view, he was preparing an amendment to the legislation to allow it.
On Monday, Sen. Sherrod Brown (D-Ohio) joined the call for aid to automakers, noting that "tens of thousands of Ohio families rely on the auto industry for their livelihood."
"The collapse of the domestic auto industry is not a viable option for our nation's economic security," Brown said.
Treasury spokeswoman Jennifer Zuccarelli said no decisions had been made about automaker eligibility. Although the White House has not embraced aid for automakers, spokeswoman Dana Perino said Monday that it was willing to listen to ideas.
The need to restructure the AIG bailout after less than two months demonstrates the difficulties of such rescue operations in relieving a continuing credit crunch.
"We have accomplished a great deal in a short period of time. But our work is only beginning," Neel Kashkari, interim assistant Treasury secretary for financial stability, said at a securities industry conference in New York.
