Here's the latest
Dems, Bush Agree On Bailout Plan For Ailing Autos
Timeline: U.S. Credit Crunch & Financial Failures
WASHINGTON (AP) ― Jolted by the loss of thousands of jobs, congressional Democrats led by U.S. House Speaker Nancy Pelosi of San Francisco and the White House reached agreement Friday on about
$15 billion in bailout loans for the beleaguered auto industry.
Several officials in both parties said the breakthrough on a long-stalled bailout came after Pelosi bowed to President Bush's demand that the aid come from a fund set aside for the production of environmentally friendlier cars.
Pelosi spoke to White House chief of staff Josh Bolten during the day to signal her change in position, they added.
The developments came as desperate auto executives pleaded for a second day with lawmakers for loans to help them survive, and the government reported the worst
single month's job loss in 34 years. President Bush also warned that at least one of the Big Three carmakers might not survive the current economic crisis.
Pelosi's office issued a statement saying legislation would come to a vote in the U.S. House next week. The U.S. Senate is also scheduled to be in session next week to consider steps to aid Detroit's Big Three.
"Congress will insist that any legislation include rigorous and ongoing oversight to guarantee that taxpayers are protected and that resources are directed to ensure the long-term viability and competitiveness of the American automobile industry," Pelosi's statement said.
Officials in both parties also said the legislation would include creation of a trustee or group of industry overseers to make sure the bailout funds were used by General Motors Corp., Ford Motor Co. and Chrysler LLC for their intended purpose.
The funds are designed to last until March, giving the incoming Obama administration and the new Congress time to consider the issue anew.
Earlier in day at the White House, Bush declared the economy was in a recession, and he urged Congress to act quickly on a multibillion-dollar industry bailout -
with taxpayer protections.
"We are going to have to have some give here," replied Massachusetts Rep. Barney Frank, a senior House Democrat, expressing optimism that compromise might be possible. It wasn't clear whether he was prodding Bush or Pelosi with his comments, but Republicans said there had been no lessening in Bush's refusal to tap the $700 billion financial industry bailout fund to help the automakers.
There were also fresh calls during the day for the Federal Reserve to come to the rescue of the Big Three, possibly in the form of low-cost loans. And Frank said he had talked with Tim Geithner, President-elect Barack Obama's choice for treasury secretary, a possible sign of involvement by the incoming administration.
"I am concerned about the viability of the automobile companies," a somber Bush said as a fresh report showed that
employers slashed 533,000 jobs in November.
The president added, "I'm concerned about those who work for the automobile companies and their families. And likewise, survive
I am concerned about taxpayer money being provided to those companies that may not survive." Bush did not elaborate, but executives at both GM and Chrysler have warned that their storied corporations could collapse by year's end.
In addition to the November layoffs, GM announced it will cut shifts at factories in Lordstown, Ohio, Orion Township, Mich., and Oshawa, Ontario, in February as a result of slumping auto sales. About 2,000 jobs were involved, bringing the year's total to 11,000.
The chief executives of GM, Ford and Chrysler, testified for a second day before Congress in support of their plea for a
$34 billion bailout in the form of loans. "We believe this is the least costly alternative," Chrysler LLC chief executive Bob Nardelli said.
For the day, at least, their appeals were overtaken by the severity of the job loss figures, the worst in 34 years.
Frank said repeatedly that the unemployment statistics had quieted talk of allowing one or more of the automakers to go bankrupt.
"I think it's fair to say that the jobs report today, this disastrous jobs report, has heightened the interest in doing something." With trademark wit, he added, "If we are lucky we will come out with a bill here that nobody likes, because any bill that any individual liked couldn't pass."
Bush renewed his call for Congress to rewrite an existing $25 billion program intended to help the industry make more fuel-efficient vehicles. But the president did not explicitly foreclose other options, and Republican aides said the White House might be open to some sort of compromise.
Congressional budget analysts have said tapping the fuel-efficiency program for a broader auto bailout would net only $7.5 billion in short-term cash but amended that to say adjustments were possible that could double that amount. Pelosi and environmentalists had opposed making use of those funds. Instead, they wanted the administration to take money from a $700 billion financial industry bailout that cleared Congress last fall.
Absent an agreement, the Senate appeared likely to convene next week for a series of votes on various alternatives, all of which would be doomed to failure. Any measure would require a 60-vote majority, an impossibility barring an agreement that involves both parties.
Nardelli, GM chief executive Rick Wagoner and Ford CEO Alan Mulally all drove to Washington this week with detailed plans describing how their companies would use loans to make their industry more competitive in the long run, material that congressional leaders had demanded as a condition for considering a bailout bill.
The hearing was drained of some of the drama that filled the room at a similar Senate session on Thursday, although Frank told the three that some lawmakers would find it difficult to support aid unless the companies abandoned lawsuits filed against several states seeking to reduce greenhouse gas emissions.
OH NO soon they will quit racing. Not happening in my world.
