Auto rescue plan runs low on support
WASHINGTON -- A $14 billion auto bailout deal among Congressional Democrats and the White House teetered Wednesday amid objections from Senate Republicans, who complained it wasn't strict enough.
House Democrats were mulling whether to vote on the plan Wednesday night and leave it to an uncertain fate in the Senate, where Majority Leader Harry Reid said it could be debated all weekend. The House began preliminary debate on the bill in the afternoon.
President-elect Barack Obama also backs emergency bridge loans for Detroit's automakers in exchange for a restructuring of their business models. So does President Bush, who sent Vice President Cheney and White House chief of staff Joshua Bolten to address a Senate Republican lunch.
Afterward, Sen. George Voinovich, a Republican from Ohio and a leading supporter of the measure, said the bill didn't have the necessary Republican votes to pass. His remarks followed a news conference at which several GOP critics lambasted the bill as not going far enough in requiring changes.
"This is only delaying their funeral," said Sen. John Ensign, R-Nev.
The bill would create a government "car czar" named by Bush to oversee assistance to General Motors gm, Chrysler and Ford f. That official would have the power to force the carmakers into bankruptcy next spring if they didn't make the necessary arrangements with labor unions, creditors and others to become viable.
The bill would give GM and Chrysler $14 billion in loans — with an extra $1 billion if conditions worsen. It sets terms for Ford, which has said it will not take a loan but will ask for a $9 billion credit line.
"It's a bill that will provide bridge financing to one of two possibilities," said Joel Kaplan, White House deputy chief of staff. "Fundamental restructuring, or bankruptcy."
House Majority Leader Steny Hoyer, D-Md., said that while "there is a great deal of reluctance" to bail out automakers, most lawmakers believe that letting them fail would be catastrophic for the economy.
But Rep. John Boehner, R-Ohio, the House minority leader, said the legislation unveiled Wednesday "asks taxpayers to further subsidize a business model that is failing to meet the needs of American workers and consumers."
He and House Republicans released a competing plan, an insurance program designed to spur private investment in the auto companies by covering up to 50% of the losses in the case of default.
A Senate Republican, Bob Corker of Tennessee, also was touting an alternative plan that calls for deeper concessions from auto workers and company bondholders. It would require the Detroit companies to bring their labor costs and work rules in line with those of Japanese-owned automakers. Democrats such as Barney Frank of Massachusetts called that unacceptable, saying the unions bargained for the wages.
Corker emerged from the Cheney meeting and told reporters that "they probably left with less support" than they came in with.
"There's less than a handful of votes in there" for the bill, Corker said.
Another problem emerged on the Democratic side. Max Baucus of Montana, who chairs the Senate finance committee, objected to a provision designed to help transit agencies.
He said in a statement that the provision, involving certain leases, "really just helps the banks that entered into these sham transactions in their attempts to avoid taxes."