Bush Administration Assures Detroit Automakers

The administration, following the defeat of a $14 billion bailout package in the Senate last week, is considering several options. They include using money from the $700 billion financial bailout fund to provide loans to the carmakers or using money from the fund as collateral for emergency loans the automakers could get from the Federal Reserve. Bush reiterated Monday that tapping the financial bailout fund remains an option.

In this photo provided by CBS, Sen. Bob Corker, R-Tenn., appears on CBS's "Face the Nation" in Washington, Sunday, Dec. 14, 2008. (AP Photo/CBS Face the Nation, Karin Cooper)

(AP)

House Speaker Nancy Pelosi, D-Calif., said the bailout funds were "the only recourse that they have" because of the failure to pass legislation in Congress. She said "something will have to happen imminently" but said requirements for restructuring should be attached to the funds.

"Otherwise, we're just giving life support, rather than a lifeline for viability into the future," Pelosi said.

White House spokesman Tony Fratto said the administration was reviewing the automakers' financial information and would not specify when a decision will be made.

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"We're considering our policy options, and when we have something to announce, we'll announce it," he said. "We'll take the time we have available to get the policy right."

The White House is keeping President-elect Barack Obama and his advisers informed of the discussions. If administration officials choose not to provide the money now, the Obama team could wait for the new Congress, which will have stronger Democratic majorities. But the delay could risk bankruptcy filings by GM and Chrysler.

The White House previously had insisted on limiting use of the Wall Street rescue plan to helping financial institutions. It changed course after the auto bailout bill failed in Congress, citing the consequences to the overall economy if U.S. carmakers failed.

Not everyone agreed. Gov. Mark Sanford, R-S.C., said in a letter Monday to Bush that using the financial bailout fund to help automakers could "be a very great mistake."

"It would open the floodgates to federal monies for every distressed industry across this country — and there will be many in this economic slowdown," said Sanford, whose state hosts a large, nonunion BMW plant that has about 5,400 workers.