Senate GOP looks to halt auto bailout

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By S.A. Miller

Senate Minority Leader Mitch McConnell threw his weight behind a Republican filibuster of the $14 billion auto bailout Thursday, crippling the measure's chances for surviving a vote that could come as soon as Friday.

He said the plan wasn't tough enough on making Detroit car companies restructure their failing businesses and didn't do enough to protect taxpayers, while putting too much power in the hands of a single, administration-picked "car czar" to oversee the bailout.

"It has also created the impression in some minds that the federal government is picking favorites, and that favored businesses get help while others don't," the Kentucky Republican said on the Senate floor.

"A lot of struggling Americans are asking where their bailout is. They wonder why one business would get support over another," he said. "When it comes to the auto industry, many Republicans in Congress have asked these same questions."

The House passed the measure which was crafted by Democrats and the White House on Wednesday night with scant Republican support.

House Speaker Nancy Pelosi called on President Bush to twist some Republican arms in the Senate to get the bailout loan passed, stressing that the deal requires sweeping restructuring of the auto industry and makes the Big Three fully accountable to taxpayers.

"With one in 10 American jobs tied to the auto industry, we must provide this jump-start for an industry that is essential to our nations economic health," Mrs. Pelosi, California Democrat, said.

Some Democratic leaders suggested a defeat in the Senate could keep lawmakers in Washington into next week to rework a rescue for General Motors Corp., Chrysler LLC and Ford Motor Co. Together, the Big Three employ about 3 million people in both autoworker and industry-related jobs.

Mr. McConnell said an amendment by Rep. Bob Corker, Tennessee Republican, would go a long way to satisfying members' unease with the bill.

The amendment would impose severe conditions on Big Three creditors and autoworkers in return for the federal handout.

It forces bondholders to accept 30 cents on the dollar to help reduce the companies' overall debt load, brings union wages immediately in line with lesser-paid workers at companies such as Nissan and Volkswagen, and replaces half the $23 billion that GM owes the United Auto Workers' benefit account with company stock.

The amendment also requires the union to do away with payments to workers still getting nearly full compensation up to four years after losing their jobs.

"Without this kind of hammer, nothing is going to happen," Mr. Corker said.

Members of Congress suffered fierce criticism back home for the $700 billion Wall Street rescue and potentially face more constituent outrage for backing another bailout, especially in conservative states without a major auto industry presence.

Still, lawmakers on both sides of the aisle agreed that the failing car companies need help. It is now a question of whether the strings attached to a handout satisfy enough senators and whether Democrats can stomach a blow to the unions.

Mr. McConnell had resisting putting the leadership's stamp on a filibuster threat, though dissatisfaction with the bailout previously was voiced by enough rank-and-file Republicans to pose a grave threat.

The Senate remains narrowly divided between the parties so that bipartisan support is critical to achieve the 60 votes required to advance most legislation.

Under the House-passed bill, President Bush would appoint a car czar who would oversee the bailout loan and have power to impose a restructuring plan on the automakers if the companies, their creditors and autoworker unions do not agree to a comprehensive business reorganization.

The bill would give the government the right to take an equity stake in the companies to help safeguard taxpayer money and would impose restrictions on management, including limits on executive pay and prohibitions on paying shareholder dividends and expensive severance packages, or "golden parachutes," for company bosses.

In a concession by Democrats, the money will come out of a previously approved $25 billion in federal loan guarantees that were intended to help the Big Three build more fuel-efficient cars. But the bailout deal includes requirements for production of cars with higher fuel efficiency and reduced emissions.