WASHINGTON -- The Senate's top Democrat called off a planned vote this week on a $25 billion auto industry bailout. Senate Majority Leader Harry Reid said Wednesday that he wanted to figure out some way to help Detroit's struggling Big Three but that efforts to do so had stalled.

 

 

 

The White House and congressional Republicans rejected Democrats' plan to dip into the $700 billion Wall Street rescue fund to finance loans to U.S. automakers.

 

 

 

A bipartisan group from auto industry states is working to cut a deal on a scaled-down aid package. If agreement can be reached, Reid said the Senate could still vote on it as part of a measure to extend jobless benefits.

 

 

 

Michigan Gov. Jennifer Granholm is expected head to Washington Thursday to offer her support behind aid for Detroits Big Three automakers. Her visit will come one day after the Big Three's top executives testified before senators and the possibility of a new bridge loan surfaced.

 

 

 

After a second day of testifying, Chrysler LLCs CEO Robert Nardelli, Ford President Alan Mulally and General Motors Corp. CEO Rick Wagoner, headed home.

 

 

 

Wagoner told reporters he was uncertain of what his two days on Capitol Hill had accomplished.

 

 

 

I dont know in the political process how that might play out but my sense is that there is a broader understanding that some people want to acknowledge the importance of making some moves here, he said. And were going to keep working it and Im going to remain optimistic about it to get the action we need.

 

 

 

United Auto Worker President Ron Gettelfinger agreed that he was unsure of what the outcome will be, but said he appreciated the opportunity to come to Washington.

 

 

 

I appreciate the fact that we had the opportunity to make the case, to straighten out a lot of the misconceptions that exist across America, he said.

 

 

 

Senate Majority Leader Harry Reid of Nevada sought to lower expectations of reaching a deal on the $25 billion proposal before Congress quits for the year.

 

 

 

While he told the Senate he still hoped lawmakers could agree to an auto deal in the "next day or two" of the current lame-duck session, he added: "If we can't do it here legislatively, I would hope that the secretary of Treasury would listen loud and clear because they could take this into their own hands and do what I think is appropriate from their perspective."

 

 

 

Responded White House press secretary Dana Perino: "There's no appetite for that." She said it was up to Congress to act.

 

 

 

Banking Committee Chairman Chris Dodd, D-Conn., was even more downbeat, calling the possibility of reaching agreement "remote."

 

 

 

"I don't see how in the next few days this is going to move forward," Dodd told reporters. Still, he added, "That does not mean that there are not opportunities." He suggested that the Federal Reserve could possibly step up to the job.

 

 

 

The difficulties of striking a deal on the package before a new president and a new Congress with expanded Democratic majorities take office appeared to be too great to overcome. The deadlock persisted even as the heads of General Motors, Ford and Chrysler returned for a second day to plead for relief and as their congressional backers urged colleagues not to punish them for past mistakes.

 

 

 

New Deal Enters Automakers Sights

 

 

 

The White House and congressional Republicans called on Democrats to sign on to a GOP plan to divert a $25 billion loan program created by Congress in September -- designed to help the companies develop more fuel-efficient vehicles -- to meet the auto giants' immediate financial needs.

 

 

 

Michigan Democratic Sens. Carl Levin D-Mich., Sen. Debbie Stabenow D-Mich. and GOP Sens. Kit Bond R-Mo. and George Voinovich, R-Ohio were at work on that measure Wednesday, toiling to placate skeptical Democrats by including a guarantee that the fuel-efficiency loan fund would ultimately be replenished.

 

 

 

"It is the only proposal now being considered that has a chance of actually becoming law," said Republican leader Mitch McConnell of Kentucky.

 

 

 

But there was little sign that Democratic leaders would go along. They are vehemently opposed to letting the car companies tap that money -- set aside to help switch to vehicles that burn less gasoline -- for short-term cash-flow needs.

 

 

 

The new bill would repurpose funds from the $25 billion previously approved Energy Department loan and make the money immediately available for the cash-strapped automakers' to use for items like payroll.

 

 

 

The loans would be released in small increments such as $2 to $5 billion. Also, the loans would be paid back in installments, immediately after the funds are released, similar to a home equity line of credit.

 

 

 

In order to get the money, car companies would have to submit to congressional oversight, including bonus and golden parachute restrictions.

 

 

 

Bleak Future Forecasted For Automakers Without Aid

 

 

 

All the options leave the Big Three bracing for a bleak winter without government help. General Motors Corp. has said it could collapse within weeks, and there are indications that Chrysler LLC might not be far behind.

 

 

 

Wagoner told a House committee Wednesday that the downfall of his industry could lead to a loss of 3 million jobs within the first year and ripple through communities around the nation.

 

 

 

In sometimes contentious testimony, Wagoner was pressed on when GM would run out of money if the loans weren't extended.

 

 

 

He wouldn't say precisely, but disclosed that the company now was burning through "$5 billion each month."

 

 

 

Still, with the $25 billion emergency package, "we think we have a good shot to make it through this," Wagoner said.

 

 

 

Rep. Carolyn Cheeks Kilpatrick, D-Mich., appeared before the House Financial Services Committee before the automakers took the hot seat and said the American military and the nation's security would be at stake if the Big Three go under.

 

 

 

She added that the automakers build the Hummers that are used overseas and even though the Big Three have exited the defense business, many of their suppliers make parts for military vehicles.

 

 

 

"Do we want to turn that over to our competitor? I don't think so," she said.

 

 

 

Many lawmakers in both parties, however, are now openly discussing whether bankruptcy might be a better option for auto firms they regard as lumbering industrial dinosaurs that have done too little to adjust their products and work forces for the 21st century.

 

 

 

Survey Says: Big Three Bankruptcy

 

 

 

The carmakers argue that bankruptcy would devastate their companies, but proponents say it would give them a chance to reorganize and emerge stronger and more competitive.

 

 

 

It's unclear whether Democrats controlling Congress are willing to risk being blamed for letting one of the Big Three -- symbols of the nation's once-mighty manufacturing sector -- go under.

 

 

 

Bailout-shy lawmakers got an earful from jittery constituents last month when the House let an early version of the Wall Street rescue fail, sending the Dow Jones industrials tumbling and erasing more than a trillion dollars in retirement savings and other investments. Congress took a deep breath and reconsidered, passing the plan a few days later.

 

 

 

Faced with a similar collapse in the auto industry, the Bush administration might yet decide to use its authority under the $700 billion financial industry bailout to help the auto companies, or the Federal Reserve could step in -- though both have steadfastly refused to do so.

 

 

 

If not, lawmakers have left themselves a contingency plan: Come back to Washington in December for yet another postelection session where they might be able to strike the deal that now seems beyond reach.

 

 

 

Democratic leaders are planning to gather for an economic conference the week of Dec. 8, noted House Majority Leader Steny H. Hoyer, D-Md.

 

 

 

"That is available," Hoyer said this week. "The year has not ended."

 

 

 

Michigan Gov. Jennifer Granholm is cutting short her trade trip to the Mideast and heading to Washington Thursday to offer her support behind a loan for Detroits Big Three automakers.

 

 

 

Granholm said approval of the loans is critical to the country's economy, energy independence and security.

 

 

 

Copyright 2008 by ClickOnDetroit.com. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

 

 

 

 

http://www.clickondetroit.com/automotive/18001565/detail.html

viewtopic.php?f=10&t=770606 :|

 

If you looked down the page, you would have seen that one just like this was just locked

http://forum.tip.it/viewtopic.php?f=10&t=770606 :|

 

If you looked down the page, you would have seen that one just like this was just locked

 

 

 

That had to deal with SHOULD they bail them out.

 

 

 

Congress just said No. So maybe that thread you pointed should be locked, since Congress has already decided.

I can see your point of view, but you need to consider mine. The thread is already in place about it. That means, that that thread can be used about it being canceled as well.

 

 

 

But hey, I don't make the decision whether or not the thread is locked/kept open, that is a moderators job.

Ah crap, there goes ALOT of jobs :(

Please use the already existing thread to voice your opinion.

 

 

 

Locked,

 

Pryomancer.