Senate Bails on Auto Bailout: What Next?

United Auto Workers President Ron Gettelfinger holds up a document during a news conference in...

United Auto Workers President Ron Gettelfinger holds up a document during a news conference in Detroit, Friday, Dec. 12, 2008. A relieved Gettelfinger said he's happy that the White House appears poised to step in and rescue the beleaguered auto industry, and he accused GOP senators who blocked emergency loans of trying to "pierce the heart" of organized labor.

(Paul Sancya/AP Photo)

The Action on Capitol Hill

Late Thursday, the effort on a bill to boost the auto industry died on a 52-35 procedural vote in the Senate, well short of the 60 votes needed to bring the bill to the floor for passage.

"I dread looking at Wall Street tomorrow," said Senate Majority Leader Harry Reid, D-Nev. "It's not going to be a pleasant sight."

Wall Street markets were surprisingly steady today.

After the vote, Reid urged the White House to use the part of the TARP funds to help keep the auto industry afloat.

Senators had spent the afternoon and evening in negotiations on an alternative measure to the one passed in the House. The late-in-the-game alternative was proposed by Sen. Bob Corker, R-Tenn., who in part wanted to revise the existing rescue deal to force pay cuts for union workers.

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On Friday, Corker said he felt a "sense of surrealness" when he thinks about how close the two sides were last night. Corker also argued that the UAW would ultimately have benefited from his plan and urged Paulson to take the elements of his plan and attach them as conditions of TARP money given to the auto companies.

After the failed Senate vote on Thursday night, the White House quickly released a statement of regret saying, "We will evaluate our options in light of the breakdown in Congress."

General Motors also issued a statement expressing disappointment. "We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis."