Automakers' bailout hinges on the details, including an overseer
— -- Congress and the White House continued to try to hammer out final details on a bill that would deliver immediate loans of up to $15 billion and create a government "car czar" to help troubled Detroit automakers survive through the first quarter.
General Motors and Chrysler have said they need loans now to avoid bankruptcy filings.
Senate Majority Leader Harry Reid said Tuesday that Congress could act on an auto bailout as early as the end of the day.
Reid, D-Nev., said a final agreement with the White House on help for the Detroit Three could come "within an hour or so," and hinges on only a couple of outstanding issues. He predicted the package could be finished by late tonight or Wednesday.
The timing, Reid said, is uncertain in part because lawmakers are still waiting on the White House to decide whether to request the second half of a $700 billion Wall Street bailout fund. "That decision has not been made yet," he said.
The agreed-upon outline of a deal would call for the government to oversee a restructuring of the companies getting loans and to gain an ownership stake. If a deal is reached, a vote could come as early as Wednesday.
But there were sticking points between congressional Democrats and the Bush administration, which indicated it did not think the bill went far enough to be sure it would result in viable companies.
One area being hammered out concerned the exact role and powers of a government overseer — one person, or a group, to supervise company restructuring plans and oversee spending — with veto power on major company decisions.
Another concerned a provision banning automakers taking the loans from suing individual states that want to impose higher greenhouse-gas emission standards than federal government rules.
In statements late Monday, GM and Chrysler agreed to the deal as proposed by congressional leaders.
Ford Motor, which says it can soldier through next year without a bailout loan, said it "fully supports an effort to address the near-term liquidity issues of GM and Chrysler," because "a failure of one of our competitors could affect us all."
A former auto leader says the numerous strings attached to the loans "will put the government and its agencies in the automobile business," and that's a bad move.
"It's just a shame this has happened. Here we have an industry gasping for air and allowing themselves to be sucked into this whirlpool of political demands," says Gerald Meyers, former head of American Motors, which Chrysler bought in 1987, who now teaches at the University of Michigan.
The proposed bailout comes amid contentious debate among members of Congress about whether Detroit car companies should be get taxpayer money, and if so, how they should be run and what they should make.
"There's not going to be an endless flow of money," declared House Speaker Nancy Pelosi, D-Calif.
Money for the loans is to come from a $25 billion pool already approved for loans to finance projects intended to reduce fuel use.
Meanwhile, the Federal Reserve would be reluctant to lend to automakers, particularly if Congress had decided against such action, Fed Chairman Ben Bernanke told lawmakers in a letter made public Tuesday.
"The Federal Reserve would be extremely reluctant to extend credit where Congress has actively considered providing assistance but, after due consideration, has decided not to act," Bernanke said in a Dec. 5 letter to Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat.
Bernanke, in response to a letter from Dodd, said the Fed has invoked its emergency authority to lend to Wall Street firms to protect financial stability, which in turn was necessary to shield the broader economy.
"Even if the companies have sufficient collateral, lending to an auto manufacturing company would represent a marked departure from that policy," he said.