Advertisement
YOU ARE HERE: LAT HomeCollections

House to vote on auto aid plan

The proposal would add the ailing industry to the $700-billion rescue package. But it faces an uphill battle in the Senate.

November 12, 2008|THE WASHINGTON POST

The House will convene next week to vote on a plan to provide emergency cash to the nation's battered automobile industry, Speaker Nancy Pelosi (D-San Francisco) said Tuesday, but a federal bailout for Detroit faces an uphill battle in the Senate and an uncertain fate at the White House.

In a written statement, Pelosi said that the failure of one of the car companies "would have a devastating impact on our economy" and that Congress must "provide emergency and limited financial assistance" by adding the industry to the Treasury Department's $700-billion economic rescue program, which was designed to stabilize the U.S. banking system.

Pelosi did not spell out details of the proposal but designated House Financial Services Committee Chairman Barney Frank (D-Mass.), a key architect of the Treasury program, to work with lawmakers in both chambers to craft the measure.

Congressional Democrats -- and Michigan Republicans -- are pressing to carve $25 billion out of the Treasury program as a bridge loan to help the car companies survive an economic crisis that analysts say has pushed the industry to the brink of collapse.

The cash would come with the same restrictions placed on other participants in the Treasury program, Pelosi said, including limits on executive compensation, a ban on golden parachutes and other "taxpayer protections to ensure that any companies that benefit from this assistance -- and not the taxpayers -- bear the full burden of repaying any costs that are incurred."

The move would greatly expand the reach of the government into the private sector and could touch off a mad scramble in other industries to claim a piece of the Treasury's bailout money. The Bush administration has rebuffed calls from Pelosi, Senate Majority Leader Harry Reid (D-Nev.) and President-elect Barack Obama, among others, to use the broad discretion Congress granted Treasury Secretary Henry M. Paulson to aid the car companies without further legislation.

But the White House has not ruled out the possibility of signing a measure that would amend the Treasury program to include the auto industry specifically.

"We'll have to see what Speaker Pelosi is proposing," White House spokesman Tony Fratto said Tuesday.

"Right now, the . . . program is being used consistent with the law and congressional intent," Fratto said. If Congress wants to change the law, we'll see how they intend to do it."

Advertisement
Los Angeles Times Articles
|
|
|