President Bush said today he has yet to make up his mind what to do about the nation's faltering auto giants, and Treasury Secretary Henry Paulson said the administration would consider an "orderly" bankruptcy plan.
With General Motors, Chrysler and the rest of Detroit anxiously awaiting a White House decision on billions of dollars in emergency federal loans, Paulson said bankruptcy for Detroit automakers should be avoided if possible but that an orderly reorganization may be the best option to keep them from collapsing.
"If the right outcome is reorganization or bankruptcy, then isn't it better to get there through an orderly process?" Paulson said in a speech to a business forum Thursday night in New York.
Paulson said it was too risky to simply let the automakers fail.
"When you look at the size of this industry and look at all those that it touches in terms of suppliers and dealers… it would seem to be an imprudent risk to take," he said.
Earlier in the day House Speaker Nancy Pelosi urged Bush to act with some urgency.
Pelosi warned that the nation can't afford to add to the currently high unemployment rolls that are already zooming at a record setting pace. More than 554,000 people applied for jobless claims just last week.
The California Democrat urged Bush to decide quickly to come to the rescue of General Motors and Chrysler to prevent "the imminent insolvency of the domestic auto industry."
She said 2 million U.S. jobs are riding on whether Bush helps the beleaguered auto industry.
The White House is wading through reams of financial statements provided by the car companies as the administration tries to decide whether to intervene and how to intervene.
Pelosi said the administration should simply adopt the accountability requirements that were included in a bill passed by the House last week, giving the government veto power over major business decisions at any car company that received federal loans. That bill died in the Senate when Republican senators insisted that unionized workers accept big cutbacks.
Since then, the White House has indicated that it is considering a bailout package that could be as large as $14 billion, but has also said a decision may not happen this week.
"I haven't made up my mind yet," Bush told the American Enterprise Institute in Washington today.
"This is a difficult time for a free-market person," Bush said. "Under ordinary circumstances, failed entities, failing entities should be allowed to fail."
The president suggested, however, that he wil do something.
"I have concluded these are not ordinary circumstances, for a lot of reasons," Bush said. "Our financial system is interwoven domestically, internationally. And we got to the point where if a major institution were to fail, there is great likelihood that there'd be a ripple effect throughout the world, and the average person would be really hurt."
Earlier, White House spokeswoman Dana Perino said, "I can tell you we're nearing a conclusion and we're very close."
She said it could still take until next week to finalize a decision, but said, "We're going to do something."
Perino said that among the options under consideration is an "orderly bankruptcy."
"There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about. That would be one of the options," she said.
Perino said today that the administration is aware of the urgency.