Despite presidential backing, top GOP senator blasts auto aid

WASHINGTON -- President-elect Barack Obama and the White House said Thursday that the weak economy can't afford the collapse of the nation's automakers, but the top Senate Republican came out against the measure.

Minority Leader Mitch McConnell said the measure "isn't nearly tough enough" on struggling automakers. The Kentucky Republican said the so-called "car czar" wouldn't have the power to force the car companies to make the tough concessions needed to ensure their survival.

And McConnell said the government shouldn't intervene in some industries and not others.

At a news conference to announce more administration officials, Obama said the government can't just stand by and watch the industry collapse because it would have a "devastating ripple effect" throughout the economy.

He told reporters in Chicago that he understands the "anger and frustration" over the situation in which the auto companies find themselves, but the added that the package under consideration in Congress is a "step forward."

White House press secretary Dana Perino cited the latest bad economic news — a jump in jobless claims to the highest level in 26 years — in arguing for Senate passage of a bailout package.

Perino said the economy is in such a weakened state that adding another 1 million people to the unemployment rolls from an auto industry failure would be crushing. She said: "We don't think the economy can sustain it."

Perino called the legislation a reasonable approach.

She said President Bush and other administration officials would be lobbying senators Thursday to vote for the bill.

The measure is the product of a hard-fought deal between Democrats and the Bush White House. It passed the House on Wednesday night, and Democrats were trying to push it through the Senate as early as day's end.

But some were less positive about the bill's prospects.

"I don't think the votes are there," Sen. George Voinovich, R-Ohio, a backer of the measure, said Wednesday. Earlier in the day, several GOP critics lambasted the bill as not going far enough in requiring changes, even though the White House supports it.

"This is only delaying their funeral," Sen. Richard Shelby, R-Ala., said of the carmakers.

The bill passed the House by a vote of 237-170. Senate Majority Leader Harry Reid of Nevada said the Senate would debate the legislation through the weekend if necessary.

On Wednesday, Bush sent Vice President Cheney and White House chief of staff Joshua Bolten to lobby Senate Republicans at their weekly lunch.

Afterward, Sen. Bob Corker, R-Tenn., told reporters, "They probably left with less support" than they came in with. "There's less than a handful of votes in there."

The bill would create a government "car czar" named by Bush to oversee assistance for American automakers. That official would have the power to force the companies into bankruptcy in spring if they don't make the necessary deals with labor unions, creditors and others to become viable.

The bill would limit executive pay, ban so-called golden parachute severance packages for departing executives and force the automakers to sell their corporate jets. It would give General Motors GM and Chrysler up to $15 billion in loans. It sets terms for Ford Motor F, 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," Joel Kaplan, Bush's deputy chief of staff, told reporters Wednesday. "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, letting them fail would be catastrophic for the economy.

"Without this bridge, we're going to fall into the greatest calamity since the Great Depression," Rep. John Dingell, D-Mich., said on the House floor.

Meanwhile, Sen. Max Baucus, D-Mont., finance committee chair, 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."

Republicans were preparing a strong fight against the aid plan in the Senate, not only taking on the Democrats but standing in open revolt against their party's lame-duck president on the measure.

The Republicans want to force the companies into bankruptcy or mandate hefty concessions from autoworkers and creditors as a condition of any federal aid. They also oppose an environmental mandate that House Democrats insisted on including in the measure.

The measure faces a difficult road in the Senate, where it needs 60 votes to advance.

Even among Senate Democrats, the level of support was still uncertain. In the House, 20 Democrats joined 150 Republicans in voting "no," while 32 Republicans sided with 205 Democrats to back the bill.

House Speaker Nancy Pelosi said it represented "tough love" for U.S. auto companies, and "giving a chance — this one more chance — to this great industry."

Contributing: USA TODAY's Ken Dilanian, Associated Press