WASHINGTON - Racing to seal a deal with the White House, Democratic congressional leaders dispatched aides Saturday to draft an emergency $15-billion aid package to pull Detroit's Big Three automakers from the brink of collapse.
Capitol Hill leaders prepared to sell yet another bailout to a skeptical Congress. It is an uphill battle: the anger is fresh over how the U.S. administration used the $700-billion Wall Street rescue fund and legislators are questioning whether the once-mighty auto giants can survive.
Still, with Washington spooked by massive job losses that provided the latest evidence of a deepening recession, the White House said it was in "constructive discussions" with legislators in both parties on the assistance.
House of Representatives and Senate Democratic staff aides worked through the weekend to hammer out details, with votes on the plan expected in the week ahead.
The emerging measure would speed short-term help to General Motors Corp., Ford Motor Co. and Chrysler LLC, while empowering the government to order a wholesale restructuring of the industry and imposing tight restrictions on the Big Three, said congressional officials and others close to the talks. They described the developing plan on condition of anonymity because the details were not final.
It is designed to tide over the companies -- particularly GM and Chrysler, which have warned they are just weeks from going bust -- through March, when Barack Obama is president and a new Congress could consider a longer-term solution.
A breakthrough on the long-stalled rescue came Friday when House Speaker Nancy Pelosi yielded to President George W. Bush on a key point: allowing the aid to come from an existing fund set aside for the production of environmentally friendlier cars.
White House press secretary Dana Perino said that was central to any agreement, along with requirements that the carmakers swallow tough business decisions and taxpayers be protected.
"Taxpayers should not be asked to finance assistance for automakers without a strong likelihood that they will be paid back," Perino said in a statement Saturday.
Pelosi said the House would consider legislation in the coming week that would include rigorous oversight and strong taxpayer protection. Senate Majority Leader Harry Reid said he aimed for votes on "a responsible plan to help the millions of Americans who rely on a healthy auto industry for their livelihoods. "
"We will need support and co-operation from Republicans to determine when that vote happens and whether it will succeed," Reid said in a statement.
But no Republicans were participating in the weekend negotiating sessions, led by aides to Representative Barney Frank, chairman of the House financial services committee, and Senator Chris Dodd, chairman of the Senate banking, housing and urban affairs committee.
Republican Senator Mitch McConnell, the minority leader, said he looks forward to seeing the bill.
"As we consider this legislation, our first priority must be to protect the hard-earned money of the American taxpayer," McConnell said in a statement.
The emerging plan remains a tough sell.
Republican Senator Bob Corker said Saturday he was "disappointed" with the still-unwritten rescue because it did not require major union givebacks or debt-restructuring moves.
"Before we even contemplate making a loan to these companies, we need to put in place specific and rigorous measures," Corker said in a statement.
Auto state legislators were cautiously optimistic.
"There's still a long ways to go. We're working all weekend here," said Democratic Senator Carl Levin of Michigan. He said there is a "good chance" Congress will act in the coming week -- "but far from certain" given that the legislation has been neither written nor reviewed by legislators.
Pelosi, a close ally of environmentalists, had steadfastly refused to tap an existing $25-billion auto loan program -- meant to finance the production of more fuel-efficient vehicles -- for emergency aid to the carmakers. But Bush would not agree to use money from the $700-billion Wall Street bailout to help the Big Three. With time running out on the current Congress and the automakers' situation increasingly dire, the window for an agreement was quickly closing.
Pelosi was seeking concessions in return for changing her position, people close to the talks said. She wanted legislative language insuring the program to modernize plants and develop green cars would be replenished early next year -- perhaps in an economic recovery bill legislators are expected to prepare for Obama shortly after he takes office Jan. 20.
The speaker also was pushing to bar the automakers from using any of the funds to pursue a legal challenge to states seeking to establish tougher auto-emission standards, although that would likely run into resistance in the Senate.
House and Senate aides also were haggling over how the government-led restructuring should take place -- either under a powerful "car czar" or a board -- and who should name the official or team overseeing it. The White House wants a trustee named by Bush to wring concessions from the automakers and their unions before any loan money can be released, congressional aides said, while Democrats want Obama to choose an overseer.
That would allow the automakers to get federal aid before agreeing to any concessions, although Democrats are proposing placing restrictions on the money, including limits on executive compensation.
The Big Three executives spent two consecutive days on Capitol Hill this past week pleading for as much as $34 billion in loans to help their industry survive. But they made clear $15 billion would be enough to keep them running until the end of March 2009. GM has indicated it needs about $10 billion to last that long, while Chrysler chief executive Bob Nardelli said his company would need $4 billion. Ford's chief executive, Alan Mulally, said Ford did not anticipate needing any federal cash during that period.
