DEAL NEAR ON AUTOMAKER AID…. As automaker executives pleaded with Congress for a rescue with increasing desperation, it appears policy makers are nearing a deal.
Jolted by news of the worst job losses in more than 30 years, congressional Democrats were near an agreement with the White House yesterday on a plan to speed at least $15 billion to the faltering Detroit automakers in hopes of averting the collapse of an industry that supports millions of U.S. jobs.
In talks with White House Chief of Staff Joshua B. Bolten, House Speaker Nancy Pelosi (D-Calif.) dropped her long-standing opposition to tapping a loan program created by Congress to fund the development of fuel-efficient cars. Pelosi agreed instead to use the money to provide immediate cash to General Motors and Chrysler. Without government help, GM executives have said their company may not survive the month.
Pelosi is insisting, however, that money pulled from the loan program be “replenished in a matter of weeks so as not to delay that crucial initiative,” she said in a statement. The White House has yet to agree to those terms, senior congressional aides said, but Democrats believe President Bush would be unlikely to veto a bill over those provisions.
Based on the plans on the table, the Big Three won’t get what they’ve asked for. The Democratic leadership is reportedly proposing a short term investment package of $15 billion to $17 billion. This would, one hopes, get GM and Chrysler through the end of the first quarter of 2009, at which point Congress and an Obama administration could craft a more long-term solution.
The news came in the midst of more bad news for the industry. Yesterday, Chrysler hired a bankruptcy firm, and GM announced another 4,600 layoffs.
So, a deal’s a deal? We’ll see. The Washington Post noted that rank-and-file House members in both parties remain skittish about an aid package for Detroit. What’s more, the New York Times reported that Senate Republicans may block the deal, while some House Republicans “have called for allowing one or more of the auto companies to enter bankruptcy.”
Policy makers are expected to work through the weekend, and Harry Reid said senators “aim to have votes next week on a responsible plan to help the millions of Americans who rely on a healthy auto industry for their livelihoods.”