House Approves Auto Bailout

But GOP senators say they want automakers' plans before handing over money.

December 10, 2008, 11:26 AM

Dec. 10, 2008— -- The House approved a $14 billion emergency loan package for U.S. automakers by a 237 to 170 margin Wednesday evening, but the bill faces an uncertain fate in the Senate.

The House voted 237-170 to approve the package, but in order for it to go through, it will have to pass in the Senate, where at least 10 Republicans will have to vote for it.

As Republicans lashed out at specific elements of the package, the White House came out in its defense, saying in a statement today that the legislation developed with congressional Democrats to rescue automakers is an "effective and responsible approach" that will "ensure the necessary restructuring occurs."

The White House promised to work with Republicans and Democrats to pass legislation to aid automakers, despite mounting criticism from GOP senators, who said they will not support the plan as it stands. The legislation would provide low-interest loans within days to Chrysler and GM -- the two companies that say they need money now to stay afloat.

Sen. David Vitter, R-La., condemned the White House's approach to provide money before the carmakers prove they have workable plans for restructuring.

"Isn't that, to use a common phrase, just ass backwards?" Vitter said earlier Wednesday. "Fifteen billion, and then later, after that's out the door, we'll see a detailed restructuring plan?"

Others object to the idea that a government-appointed "car czar" would know how to fix the industry, and say the money will simply be wasted with no real changes being made.

"Americans are not stupid," said Sen. Jim Demint, R-S.C. "They know this bailout is only a temporary solution."

Even a Republican supporter in the Senate, Sen. Kit Bond of Missouri, expressed concern with the bill and said he would try to change it in debate on the Senate floor.

"While I am fighting to save Missouri auto jobs, Congress is just putting off the inevitable unless we force the companies to reform fundamentally, which this latest plan fails to do and is why I am offering changes to make it work," said Bond in a statement.

Votes Needed for Bill

Senate Majority Leader Harry Reid suggested that the bill could keep senators in town through the weekend.

"It seems very clear that the minority Republicans will not go forward until they have the time to study this," Reid said Wednesday morning.

This morning, Senate Minority Leader Mitch McConnell, R-Ky., promised "more substantive thoughts" after he had seen the bill.

Congressional leaders and the White House have cleared a major hurdle in crafting an agreement, but now comes the hard part.

"This gets us to the 20-yard line, but getting over the goal line will take a major effort," said Sen. Carl Levin, D-Mich., Tuesday night. "We will need the personal involvement of President Bush and President-elect [Barack] Obama."

Indeed, the situation in the Senate is tricky. McConnell told ABC News Tuesday night that he's not sure the measure will pass and is, in fact, still undecided himself on how to vote. Some Democratic senators, too, could oppose the measure.

To get the 60 votes necessary to end the debate and vote for passage, the bill will likely need the support of at least a dozen Republicans, probably more.

"The public doesn't like it," McConnell said, "and in our line of work, that's important."

Congressional leaders and the White House have been hashing out a plan to give General Motors and Chrysler a total, short-term infusion in low-interest loans to stay afloat in the months ahead.

Power of the Industry Czar

The draft bill, first sent to the White House Monday, would call on Bush to select one or more people within the executive branch to authorize, disperse and oversee a loan for the auto industry.

That "car czar" would have the power to reshape the industry and negotiate deals among auto companies, unions, creditors and suppliers. The designee also could force car companies into Chapter 11 bankruptcy if they don't have a viability plan by March 31.

"They either have a long-term plan that's viable, or we get our money back," White House deputy chief of staff for policy Joel Kaplan, who is leading White House negotiations on the bailout, said today. "And if we call our money back, which is required under this bill, then those firms are not going to be able to survive.

"We wanted to make sure this was tough and not bridge financing to nowhere," he said.

Kaplan said the car czar would meet with the shareholders of the automakers over the course of the next few months and "get into their books."

"So, this is not somebody who's going to run the companies," Kaplan said. "It is somebody who is going to be empowered to bring, like I said before, bring them around a table, knock heads, and tell them, 'If you want assistance from the taxpayer going forward, you're going to have to make some difficult concessions. Now, what are those concessions you're prepared to make? And show me how that adds up to a plan for financial viability.'"

Automakers Make Their Case to Congress

General Motors, Chrysler and Ford have repeatedly made their case to lawmakers and U.S. taxpayers to explain why they need a loan. GM CEO Rick Wagoner told lawmakers last week that, without an infusion of $4 billion in taxpayer loans before the end of the year, the company would go bankrupt and have to be liquidated.

Ford has also requested loans but negotiators have determined the company will not receive funding at this point.

According to an ABC News/Washington Post poll, 54 percent of those surveyed oppose giving automakers up to $34 billion in federal loans, while 37 percent support it.

ABC News' Rachel Martin and Dean Norland contributed to this report.

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