Congressional backers offer to cut automaker bailout package

Saturday, November 15, 2008 | 5:49 p.m. CST

WASHINGTON – Facing an uphill battle in Congress and stiff opposition from President George W. Bush, supporters of a government bailout for the sinking U.S. auto industry are offering to reduce its $25-billion size.

General Motors Corp., Ford Motor Co. and Chrysler LLC, battered by an economic meltdown that has choked their sales and frozen credit, are lobbying lawmakers furiously for an emergency infusion of cash. GM has warned it might not survive through the year's end without a government lifeline.

Other auto suppliers and dealers with showrooms empty of customers plan to join the effort Monday when Congress returns following the Nov. 4 elections. The key Senate vote on preventing opponents from blocking the package could occur as early as Wednesday.

"There's a need for immediate action," Alan Reuther, the United Auto Workers union's legislative director, said Friday. He said one option under consideration was a smaller, more targeted amount of funding "that would get the companies through to March."

Sen. Debbie Stabenow, a Michigan Democrat, said negotiations were taking place among senators on what the amount should be. "This is about getting enough votes to be able to solve the problem," she said.

Democrats want to carve a portion of the $700 billion that the Bush administration is using to bail out banks, insurance companies and other financial institutions. The White House on Friday came out firmly against the approach.

White House press secretary Dana Perino said the administration would rather Congress expedite the release of a separate $25-billion loan program for the development of fuel-efficient vehicles and have the loans used for more urgent purposes as the companies struggle to stay afloat.

"Democrats are choosing a path that would only lead to partisan gridlock," Perino said.

Environmentalists and House Speaker Nancy Pelosi have vehemently opposed using that money for anything other than designing and building vehicles that get higher gas mileage and produce less pollution-causing emissions. Democrats hold a 37-seat majority in the House, and bailout supporters foresee little difficulty winning its passage there.

But the measure needs 60 votes to survive in the Senate, where Democrats will hold a razor-thin 50-49 majority when President-elect Barack Obama gives up his seat on Monday. A furious search was on for a dozen Republicans to break the anticipated filibuster from opponents.

Several Republicans have already lined up against the measure. "Like most Americans who are concerned about the direction of our economy and more federal spending, I must also ask — when is enough, enough?" said Sen. John Cornyn of Texas.

Two Republicans — Kit Bond of Missouri and George Voinovich of Ohio — said they will back the plan. Several other Republican senators have signaled they might accept a rescue if strict conditions are put on Detroit's Big Three companies, including management and salary changes, union concessions and a commitment to making more fuel-efficient vehicles.

Bond, whose home state of Missouri has several auto plants, said the concept of government mixing with the free market was "very troublesome." But he added, "We have to act in unique times of crisis when tens of thousands of Missouri workers are in danger of losing their jobs."

Democrats are modeling their bill on the bailout terms that the Bush administration has used for doling out $290 billion to banks and insurance companies. The government would get an ownership stake in the auto companies in exchange for the loans to ensure that taxpayers would get their money back if they return to profitability.


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