Jobs report aids Big Three’s bailout case

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Detroit’s Big Three automakers received a marginally warmer reception Friday on the second day for their Capitol Hill lobbying blitz for a federal bailout, boosted by a new jobs report that showed the nation’s economic plight worsening by the day.

President Bush, discussing the grim unemployment numbers, told reporters at the White House he was “concerned about the viability” of General Motors, Ford Motor Co. and Chrysler LLC and lawmakers should move quickly to help them.

“It is important that Congress act next week on this plan,” Mr. Bush said. “And it’s important to make sure that taxpayers’ money be paid back if any is given to the companies.”

On Capitol Hill, both House Financial Services Committee Chairman Barney Frank and ranking Republican Rep. Spencer Bachus of Alabama expressed concern that sending the executives of General Motors, Ford Motor Co. and Chrysler LLC home empty-handed would be a body blow to the larger economy.

“For us to do nothing, to allow bankruptcies and failures in one or three of these companies in the midst of the worst credit crisis and the unemployment situation that we’ve had in 70 years, would be a disaster,” Mr. Frank said.

But there remains widespread skepticism on Capitol Hill about an industry bailout, with many saying the companies’ woes are tied not to the global credit crunch but to their own management, marketing, labor and cost problems. Lawmakers face a tight deadline even to draw up a bill in a possible lame-duck session next week.

The three U.S. auto companies are seeking a combined $34 billion in loans and credit lines from the federal government. General Motors and Chrysler say that they need $11 billion in federal rescue just in the next few weeks if they are to avoid collapse.

There was little sign Friday that Congress and the White House are close to an agreement on whether and how to get money to the struggling companies. Leading congressional Democrats, including House Speaker Nancy Pelosi of California and Senate Banking Committee Chairman Christopher Dodd have urged the Bush administration to tap the $700 billion Wall Street bailout fund set up to help the Big Three, a step Treasury Secretary Henry M. Paulson Jr. has rejected.

Mr. Bush Friday again proposed letting the car companies use an existing $25 billion Department of Energy program to promote fuel-efficient cars to bankroll the bailout — an idea Mrs. Pelosi and environmental groups reject.

Other proposals include offering the carmakers a smaller “bridge loan” to let the incoming Obama administration work on a long-range plan. Others say a bankruptcy filing — perhaps made quicker with federal aid — is preferable to yet another industry bailout.

President-elect Barack Obama has said he supports aid to Detroit, but opposes a “blank check” to the automakers if they fail to produce a long-term plan to return to profitability.

But he has declined to enter into the frantic negotiations on Capitol Hill over how to fashion a bailout, a stance that has left some congressional Democrats frustrated.

Mr. Obama “is going to have to be more assertive than he’s been,” Mr. Frank told a group of consumer advocates earlier this week.

About the Author
David R. Sands

David R. Sands

Raised in Northern Virginia, David R. Sands received an undergraduate degree from the University of Virginia and a master’s degree from the Fletcher School of Law and Diplomacy at Tufts University. He worked as a reporter for several Washington-area business publications before joining The Washington Times.

At The Times, Mr. Sands has covered numerous beats, including international trade, banking, politics ...

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