Will Senate Buy The Auto Industry Bailout?
The House has given its OK to $14 billion worth of bridge loans to help Detroit's struggling carmakers, but the measure was heading into likely trouble in the Senate, where it could come up for a vote as early as Thursday.
The 237-170 vote in the House late Wednesday would provide loans to General Motors Corp. and Chrysler LLC almost immediately, while Ford Motor Co. — which has said it has enough cash to make it through 2009 — would be eligible if it needed to tap the loan money later.
House Democrats and the White House hoped the Senate would vote on the legislation as early as Thursday.
But many Republicans have expressed opposition to the bill, with some suggesting that bankruptcy might be a better option for the automakers. Other GOP senators have demanded that any federal help be contingent on specific restructuring plans, including steep wage cuts and debt restructuring.
"People realize that this bill is an incredibly weak bill [and] is the product of an administration that wants to kick the can down the road and let somebody else deal with it," said Sen. Bob Corker (R-TN).
The level of support among Senate Democrats was also uncertain.
The measure would create a government "car czar" who would oversee the loans and have the authority to terminate them and force the carmakers into bankruptcy if the companies fail to cut quick deals with labor unions, creditors and others. The Bush administration is expected to work with President-elect Barack Obama's team in choosing the industry overseer.
Senate Minority Leader Mitch McConnell said the measure "isn't nearly tough enough" on struggling automakers. The Kentucky Republican said the car czar wouldn't have the power to force the car companies to make the tough concessions needed to ensure their survival.
The House bill would require the manufacturers to submit restructuring blueprints to the car czar on March 31.
CEOs of the Big Three first asked Congress for $25 billion in mid-November, then raised the request to $34 billion when they returned two weeks later. The bill passed by the House on Wednesday represents a compromise between congressional Democrats and the White House to use $14 billion from an existing program designed to help manufacturers retool to make more fuel-efficient cars.
Democrats backed off a demand opposed by the White House that would have forced the auto companies to drop lawsuits challenging tough emissions limits in California and other states.
From wire reports
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