U.S. auto bailout could come Wednesday
The U.S. Congress and the White House reached for a final deal Tuesday to speed a $15-billion US loan package to the struggling auto industry, hoping for votes as early as day's end.
Senate Majority Leader Harry Reid said he hoped for a vote by Wednesday as congressional Democrats and White House officials traded legislative proposals behind the scenes, haggling over the final details.
The core of the bill — and its aim — was not in dispute, however. It would provide emergency loans to two of Detroit's Big Three auto makers — Ford Motor Co. has said it doesn't need an immediate cash transfusion — and create a presidentially appointed "car czar." The federal overseer would supervise a broad industry restructuring and would be empowered to yank the money back if the carmakers weren't doing enough to ensure their own survival.
The fast-paced developments come amid an environment of general economic instability, the Congress and the presidency both in transition, a ricocheting Wall Street and the Federal Reserve Board, Treasury and other agencies fighting to steady the reeling financial industry.
A final deal hinged on only a couple of outstanding issues, Reid, a Nevada Democrat, said.
"We would hope that we could complete work on this Detroit situation tonight or tomorrow," he said on the Senate floor.
Still, the few differences remaining were significant. The White House and congressional Republicans were demanding tougher consequences for carmakers that couldn't prove to the government they were viable, including a requirement — rather than an option — for them to be cut off from federal aid.
Republicans also were demanding that Democrats scrap a requirement that car companies getting loans drop their lawsuits against states that impose tougher emissions standards than the federal rules.
Sen. Mitch McConnell, a Republican from Kentucky, said he was concerned that Democrats were proposing a package that "fails to require the kind of serious reform that will ensure long-term viability for struggling automobile companies."
With their approach, "We open the door to unlimited federal subsidies in the future," McConnell said.
The White House has said it shares those concerns.
"There will not be long-term financing if they can't prove long-term viability," White House Press Secretary Dana Perino said.
She said the White House and Congress have made a lot of progress.
"I think overall we're headed in the right direction," Perino told reporters aboard Air Force One as President George W. Bush headed to West Point, N.Y., for a speech.
"We're working fast. but we're also wanting to get it right," she said, adding that "I don't know if we'll have something finalized today. It's possible."
Reid said the timing of an auto rescue vote is uncertain, partly because lawmakers are still waiting on the White House to decide whether to request the second half of a $700-billion Wall Street bailout fund. "That decision has not been made yet," he said.
The current Congress is ready to depart for the year after this week, with the auto bailout legislation among the only things delaying lawmakers' abbreviated winter break.
Cash from the Big Three bailout would immediately be plowed into General Motors Corp. and Chrysler LLC. Ford said Monday night that it does not have an emergency cash-flow problem and that it would not ask for short-term assistance. The czar would come up with terms for restructuring the beleaguered firms by Jan. 1, 2009.