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House Expected To Vote On Auto Industry Bailout

Spencer Platt
/
Getty Images
Auto dealership employees, mechanics and members of the United Auto Workers rally Monday in New York City in support of the proposed auto industry bailout.

Democratic lawmakers and the Bush administration have finalized a deal to speed $14 billion in emergency loans to U.S. automakers, according to a draft of the deal released Wednesday.

The White House would only say that the deal has made "very good progress." It could go to a procedural vote in the House on Wednesday and be enacted by week's end.

But congressional Republicans, left out of negotiations, could block the measure.

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Sen. David Vitter (R-LA) promised to filibuster the measure, which could delay a final vote for days.

Senate Republican Leader Mitch McConnell of Kentucky said his side hadn't seen the measure yet and wouldn't agree to votes on the measure Wednesday.

"Republicans will not allow taxpayers to subsidize failure," he said.

The plan would allow GM and Chrysler to avert threatened bankruptcy through March. Ford, which is in a somewhat more stable financial position, has requested an emergency line of credit for use later if its balance sheet deteriorates.

While the Big Three would be thrown a lifeline in the form of low-interest loans, the money would not come without stringent conditions — the government will become the companies' biggest shareholder, and a so-called "car czar" will be appointed to oversee the manufacturers.

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The czar could withhold additional loans or recommend a bankruptcy restructuring if progress toward a turnaround stalls.

Republicans wanted a bankruptcy option as an incentive for labor unions to agree to concessions. They expressed concern over Chrysler, which is owned by private equity firm Cerberus Capital Management. During the talks, Democratic aides said the Bush administration resisted a bid to hold Cerberus liable for repayment if the auto company defaulted on any government loan.

One sticking point could be Democrats' insistence that automakers drop lawsuits against California and other states that have passed auto emissions standards in excess of those mandated at the federal level.

From wire reports

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