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US Congress works on a deal to save automakers

(Agencies)
Updated: 2008-12-07 21:46

WASHINGTON – Supporters of an emergency rescue for the Detroit auto industry face an uncertain outcome in their effort to craft a US$15 billion aid package for the troubled and nearly broke carmakers.

Auto industry workers and supporters demonstrate outside the office of Sen. Diane Feinstein, D-Calif., Saturday, December 6, 2008, in San Francisco. [Agencies]

Democratic congressional leaders dispatched aides Saturday to draft a measure to pull the Big Three automakers from the brink of collapse while Capitol Hill leaders prepared to sell yet another bailout to a skeptical Congress.

The emerging measure would speed short-term help to General Motors Corp., Ford Motor Co. and Chrysler LLC, while empowering the government to order a wholesale restructuring of the industry and imposing tight restrictions, according to congressional officials and others close to the talks. They described the developing plan on condition of anonymity because the details were not final.

Related readings:  Lawmakers, White House agree on $15b auto bailout  Big Three automakers to submit plans to Congress  US automakers ask Congress for $34 billion in aid  Recession-hit automakers brace for grim US sales

It is designed to tide over the companies — particularly GM and Chrysler, which have warned they are just weeks from going bust — through March, when Barack Obama is president and a new Congress could consider a longer-term solution.

A breakthrough came Friday when House Speaker Nancy Pelosi, D-Calif, yielded to President George W. Bush on a key point: allowing the aid to come from an existing fund set aside for the production of environmentally friendlier cars.

White House press secretary Dana Perino said that was central to any agreement, along with requirements that the carmakers swallow tough business decisions and taxpayers be protected.

Pelosi said the House would consider legislation in the upcoming week that would include rigorous oversight and strong taxpayer protections. Senate Majority Leader Harry Reid, D-Nev., said he aimed for votes on "a responsible plan to help the millions of Americans who rely on a healthy auto industry for their livelihoods."

But no Republicans were participating in the weekend negotiating sessions, led by aides to Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, and Sen. Chris Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee.

The emerging plan remained a tough sell. Sen. Bob Corker, R-Tenn., said he was "disappointed" with the still-unwritten rescue because it did not require major union givebacks or debt restructuring moves.