Congress, White House Talking $15B Auto Bailout

Auto executives, from left, General Motors Chief Executive Officer Richard Wagoner, Chrysler Chief Executive Officer Robert Nardelli and Ford Chief Executive Officer Alan Mullay prepare to testify on Capitol Hill, Dec. 5, 2008.

(Gerald Herbert/AP Photo)

Stunned by the loss of 500,000 jobs, congressional Democrats and the White House reached for agreement Friday on about $15 billion in bailout loans for the beleaguered auto industry. President George W. Bush warned that at least one of the Big Three carmakers might not survive the current economic crisis.

Several officials in both parties said a key breakthrough on the long-stalled bailout came when House Speaker Nancy Pelosi bowed to Bush's demand that the aid come from a fund set aside for the production of environmentally friendlier cars. The California Democrat spoke to White House chief of staff Josh Bolten during the day to signal her change in position, they added.

The developments unfolded 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.

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Pelosi's office issued a statement saying legislation would come to a vote in the House next week. The Senate is also scheduled to be in session 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.

In a subsequent statement, she added that the billions originally ticketed for development of more environmentally friendly cars would be repaid "within a matter of weeks." Democrats said her hope was to include the funds in an economic recovery bill that lawmakers are expected to prepare for President-elect Barack Obama's signature shortly after he takes office.

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.