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WORLD> America
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Dems delay auto bailout vote, seek plan from Big 3
(Agencies)
Updated: 2008-11-21 09:38 WASHINGTON -- The $25 billion rescue plan for the auto industry, desperately sought by Detroit's beleaguered Big Three, collapsed Thursday as Congress drew the line at one more bailout and Democrats said they wouldn't even consider it until the companies produced a convincing plan for rebuilding their once-mighty industry.
The demise of the rescue, at least for now, left uncertain the fate of General Motors Corp., Ford Motor Co. and Chrysler LLC, and sent Wall Street spiraling to its lowest level in years. The Dow Jones industrials dropped 445 points, the second straight plunge of more than 400, and hit the lowest point in nearly six years. The carmakers have been clobbered by lackluster sales and choked credit, and are battling to stay afloat through year's end. Failure of one or more of the Big Three would be a severe further blow to the floundering economy, and to many Americans' view of the nation's industrial strength, and throw a million or more additional workers off the job. Just Thursday, the government reported that laid-off workers' new claims for jobless aid had reached a 16-year high and the number of Americans searching for work had soared past 10 million. Congress approved a measure to extend jobless benefits through the holidays, and the White House said President George W. Bush would quickly sign it. But Democratic leaders scrapped votes on the auto rescue, postponing until next month a politically tricky decision on whether to approve yet another unpopular bailout at a time of economic peril, or risk being blamed for the implosion of an industry that employs millions and has broad reach into all aspects of the US economy. "Until they show us the plan, we cannot show them the money," Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol. GM and Ford quickly issued statements promising to submit the blueprint the Democrats demanded. Pelosi and Senate Majority Leader Harry Reid, D-Nev., said Congress might return to work in early December for a vote on aid to the carmakers, but only if they show Congress they could use the funds to transform their struggling industry into a viable one. For now, however, the Democrats said the aid plan lacked the support to pass Congress and be signed by Bush. Bush and congressional Republicans had balked at Democrats' suggestion to draw emergency auto industry loans from the $700 billion Wall Street rescue fund. And most Democrats were unwilling to go along with a separate, bipartisan effort backed by the White House to temporarily divert an existing program to help carmakers produce vehicles that burn less gasoline to cover the companies immediate financial needs. But with GM warning it could go under before year's end, Democratic leaders were unwilling to close up shop for the year and appear to turn a deaf ear to the industry. They called for a Big Three viability plan by Dec. 2, scheduled hearings that week on the report, and said a vote on a bailout could come the week of Dec. 8. "Yes, we're kicking the can down the road, because that will give us the opportunity to do something positive," Reid said. "But that will only happen if they get their act together." The White House criticized the delay, saying the plan to let the automakers tap the fuel-efficiency loans for their short-term cash needs should be considered. "If there are lawmakers who want to help the automakers, and they have a path to do so, why are they going to kick the can down the road?" said Dana Perino, the White House press secretary. |
