By JULIE HIRSCHFELD DAVIS
WASHINGTON
Racing to seal a deal with the White House, Democratic congressional leaders dispatched aides Saturday to draft an emergency $15 billion aid package to pull Detroit’s Big Three automakers from the brink of collapse.
Capitol Hill leaders prepared to sell yet another bailout to a skeptical Congress. It is an uphill battle: The anger is fresh over how the Bush administration used the $700 billion Wall Street rescue fund and lawmakers are questioning whether the once-mighty auto giants can survive.
Still, with Washington spooked by massive job losses that provided the latest evidence of a deepening recession, the White House said it was in “constructive discussions” with lawmakers in both parties on the assistance. House and Senate Democratic staff aides worked through the weekend to hammer out details, with votes on the plan expected in the week ahead.
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 on the Big Three, 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.
It is designed to tide over the companies – particularly GM and Chrysler, which have warned that 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 on the long-stalled rescue 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.
“Taxpayers should not be asked to finance assistance for automakers without a strong likelihood that they will be paid back,” Perino said in a statement Saturday.
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. ”
“We will need support and cooperation from Republicans to determine when that vote happens and whether it will succeed,” Reid said in a statement.
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.
Sen. Mitch McConnell, R-Ky., the minority leader, said he looked forward to seeing the bill. “As we consider this legislation, our first priority must be to protect the hard-earned money of the American taxpayer,” McConnell said in a statement.
The emerging plan remained a tough sell. Sen. Bob Corker, R-Tenn., said Saturday he was “disappointed” with the still-unwritten rescue because it did not require major union givebacks or debt restructuring moves.
“Before we even contemplate making a loan to these companies, we need to put in place specific and rigorous measures,” Corker said in a statement.
Auto state lawmakers were cautiously optimistic.
“There’s still a long ways to go. We’re working all weekend here,” said Sen. Carl Levin, D-Mich. He said there was a “good chance” Congress would act in the coming week – “but far from certain” given that the legislation has been neither written nor reviewed by lawmakers.
Pelosi, a close ally of environmentalists, had steadfastly refused to tap an existing $25 billion auto loan program – meant to finance the production of more fuel-efficient vehicles – for emergency aid to the carmakers. But Bush would not agree to use money from the $700 billion Wall Street bailout to help the Big Three. With time running out on the current Congress and the automakers’ situation increasingly dire, the window for an agreement was quickly closing.
Pelosi was seeking concessions in return for changing her position, people close to the talks said. She wanted legislative language insuring that the program to modernize plants and develop green cars would be replenished early next year – perhaps in an economic recovery bill that lawmakers are expected to prepare for Obama shortly after he takes office Jan. 20.
The speaker also was pushing to bar the automakers from using any of the funds to pursue a legal challenge to states seeking to establish tougher auto emission standards, although that would likely run into resistance in the Senate.
House and Senate aides also were haggling over how the government-led restructuring should take place – either under a powerful “car czar” or a board – and who should name the official or team overseeing it. The White House wants a trustee named by Bush to wring concessions from the automakers and their unions before any loan money can be released, congressional aides said, while Democrats want Obama to choose an overseer.
That would allow the automakers to get federal aid before agreeing to any concessions, although Democrats are proposing placing restrictions on the money, including limits on executive compensation.
The Big Three executives spent two consecutive days on Capitol Hill this past week pleading for as much as $34 billion in loans to help their industry survive. But they made clear that $15 billion would be enough to keep them running until the end of March 2009. GM has indicated it needs about $10 billion to last that long, while Chrysler chief executive Bob Nardelli said his company would need $4 billion. Ford’s chief executive, Alan Mulally, said Ford did not anticipate needing any federal cash during that period.
Associated Press writers Ken Thomas and Ben Feller contributed to this report.
