Democrats want details for auto bailout

By David R. Sands (Contact) | Friday, November 21, 2008

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Top congressional Democrats Thursday conceded they lacked the votes to pass a $25 billion bailout for the U.S. auto industry and said they would try again in December.

House Speaker Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada demanded that the nation's Big Three automakers submit a detailed plan on how much taxpayer money they would need and how they would use the funds before Congress would even consider a rescue package.

"Until they show us a plan, we cannot show them the money," Mrs. Pelosi told reporters.

Related story:In Detroit, locals brace for holidays

Mr. Reid said Congress was "kicking the can down the road" because the heads of General Motors Corp., Ford Motor Co. and Chrysler LLC had failed to sway lawmakers during two long days of testimony before House and Senate panels this week.

"We do not have the votes" to pass an aid bill now, Mr. Reid said. "What happened in Washington this week was not good for the auto industry."

The decision to delay a vote short-circuited a last-minute effort by senators from Michigan and other midwestern states to broker a compromise to help the beleaguered industry before the lame-duck session of Congress recessed at the end of the week.

Mr. Reid and Mrs. Pelosi said that the auto companies would have to submit a detailed plan including "accountability and viability" for the industry if federal aid is given.

House Financial Services Committee Chairman Barney Frank, Massachusetts Democrat, and Senate Banking Committee Chairman Christopher Dodd, Connecticut Democrat, would first examine the plan in early December, with the full House and Senate prepared to return once more to Washington the week of December 8 to vote if necessary.

Detroit's Big Three have made a concerted plea for help, saying their restructuring efforts have been undercut by the global financial crisis.

But many of Capitol Hill argue the companies themselves are partly to blame, the victims of their own management, marketing and engineering mistakes over the years.

The White House and top congressional Democrats have also been at odds over how to finance any auto industry bailout.

Mr. Reid, Mrs. Pelosi and others say the administration could immediately tap the $700 billion Wall Street rescue package Congress approved last month to help the struggling car companies.

President Bush and Treasury Secretary Henry M. Paulson Jr. have opposed that idea, saying the bailout money is still needed to prop up the fragile U.S. credit markets.

The White House has proposed that Congress modify a second $25 billion Department of Energy loan program already approved for the carmakers to help them produce new fuel-efficient cars. But that idea has been opposed by Mrs. Pelosi and many House Democrats.

General Motors Corp. Chairman Rick Wagoner warned lawmakers that the country's largest carmaker could run out of money by the end of the year, and could not wait until the new Obama administration took office in January.

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