WASHINGTON -- Congress and White House negotiators reached an agreement in principle late Tuesday for $15 billion in loans to keep General Motors GM and Chrysler afloat into the first quarter.
"We are making progress and are optimistic that we will have a reasonable compromise that will protect taxpayers and ensure the long-term viability of the American auto companies," said Brendan Daly, spokesman for House Speaker Nancy Pelosi.
Work continued on details of a final bill. If that's successful, the bill could be considered by Congress this week.
Reflecting that passage would not be assured, a statement from Sen. Carl Levin, D-Mich., a strong supporter of the U.S. auto companies, said, "This gets us to the 20-yard line, but getting over the goal line will take a major effort, particularly in the Senate where we need 60 votes."
Levin called on President Bush and President-elect Obama to personally push for passage if a bill comes to a vote.
The congressional bailout proposal, outlined Monday and negotiated with the White House, would give automakers seven-year loans in return for warrants for stock, plus a list of conditions. GM and Chrysler have said they face bankruptcy filings if they don't receive loans. They're running out of cash because car sales have collapsed.
The strings attached to the loans have been at issue between the administration and Democratic leaders.
One sticking point has been the role and powers of a proposed "car czar," a government overseer to supervise company restructuring. A key area concerns requiring GM and Chrysler to satisfy the overseer by the end of the first quarter with restructuring plans for "viable" companies to qualify for additional loans.
GM has asked for up to $18 billion overall and Chrysler for $7 billion. Ford F, which says it has enough cash to survive, has asked for no loans immediately, but for an emergency $9 billion line of credit it hopes not to tap.
Pelosi, D-Calif., said earlier Tuesday on NBC's Today show that the car czar could be named this week if a bill passes. She suggested former Fed chairman Paul Volcker, Obama's top adviser on steering the economy out of recession.
Underscoring automakers' plight, GM announced up to $10,000 rebates on leftover 2008s. "Quite unusual," says Jesse Toprak, market analyst for Edmunds.com, adding it could make it harder to sell 2009s.