Bailout plan could soon face House vote
By John Crawley and Thomas Ferraro
WASHINGTON (Reuters) – The U.S. House of Representatives could vote as early as Wednesday on a $15 billion plan to bail out and restructure U.S. automakers but the initiative may face Republican roadblocks in the Senate. According to an article on freshloan.co.uk – the White House and congressional Democrats sought to quickly finalize an agreement in principle struck Tuesday night on conditions for providing $15 billion in low-interest loans to avert a threatened industry collapse if one or more of “The Big Three” U.S. automakers were to fail. But some issues remained unresolved, apparently including a Democratic demand that automakers drop lawsuits against states seeking to reduce tailpipe pollution.
“Still no deal/bill,” a Senate Republican leadership aide wrote in an e-mail to Reuters.
“Bill mostly written,” e-mailed a Democratic leadership aide. “A couple of outstanding issues. More to come” later in the day.
Democratic aides said negotiators, following days of marathon talks, wanted to go over any proposed bill, “line by line,” before announcing any final accord.
Yet Democratic Sen. Carl Levin of Michigan, whose home state is headquarters to General Motors Corp, Ford Motor Co and Chrysler LLC, declared victory late on Tuesday after word of a breakthrough.
“I understand an agreement has been reached,” Levin said in a statement.
Levin urged Republican President George W. Bush and Democratic President-elect Barack Obama to help rally support for the pending measure.
A Bush administration official said late Tuesday that negotiators satisfied the key White House concern in the talks that companies receiving aid obtain the necessary concessions and make other changes to prove they can survive and compete.
In addition to providing loans, the proposal would force automakers to answer to a presidentially appointed trustee — or “car czar” — and make the government their biggest shareholder.
The overseer will have powers to shape a restructuring of the companies, withholding further loans if progress toward a turnaround stalled.
A key provision would permit the czar to recommend a bankruptcy restructuring if companies borrowing money fail to obtain the necessary concessions.
Democrats control Congress and are expected to be able to push a bill through the House. But they may run into trouble in the Senate where Republicans could raise a roadblock that would take 60 votes to clear.
A top Republican aide, who earlier this week predicted passage of such a measure, voiced caution, saying a number of Republicans would want a chance to amend the bill.
“It’s not going to be a slam dunk,” the aide said. “Democrats are going to have to be careful about dropping a bill on us without allowing an amendment or two.”
With Obama having recently resigned from his Senate seat, Democrats hold the chamber 50-49. Democrats figure at least a few Democrats may oppose a bailout and they will need 12 to 15 Republicans to get the 60 votes to move toward passage of a bill, a senior aide said.
“Ball is in the Senate Republicans’ court,” said Jim Manley, a spokesman for Senate Majority Leader Harry Reid, a Nevada Democrat. “There is no word yet whether they will give us consent.”
The bailout plan is designed to allow GM and Chrysler to avert threatened bankruptcy through March. Ford has requested an emergency line of credit for use later if its finances worsen further.
Some Republicans wanted some sort of bankruptcy option included as an incentive for labor and other stakeholders to agree on givebacks.
Among issues raised by Republicans is the use of taxpayer money in the case of Chrysler, which is owned by private equity firm Cerberus Capital Management. During the talks, Democratic aides said the Bush administration resisted a bid to hold Cerberus liable for repayment if the auto company defaulted on any government loan.
The administration official, who spoke on the condition that he not be identified because the deal had not been finalized, would not comment on specific companies so it remains unclear if that matter still needs to be cleared up.
An auto bailout has evoked competing emotions in Congress.
Lawmakers fear if automakers collapse, it would deepen the U.S. recession. But many say market forces, not a government saddled with a record deficit, should determine their fate.
A poll by CBS News conducted last week found Americans split on whether taxpayer funds should help automakers.
(Additional reporting by Kevin Krolicki in Detroit and Donna Smith and Richard Cowan in Washington; Editing by Eric Beech)