The United States Senate was due to reconvene on Monday as White House and Democratic congressional negotiators sought to draft legislation to bail out the US car industry and stem a deepening of the US recession.
Even if they manage to finalise an agreement in principle to provide the ”Big Three” carmakers with at least $15-billion in short-term loans, it was uncertain if it would become law.
Democrats have a majority in the 100-member Senate, which could begin consideration of legislation within days. But skeptical Republicans could kill such a measure with a procedural hurdle that would need 60 votes to clear.
Democratic Senator Carl Levin of Michigan, where the US car industry is centered, said he was confident there would be a deal by Monday, but uncertain if there would be the votes.
”That’s a much more complicated question,” Levin told Fox News Sunday.
Democratic negotiators modified their draft proposal on Sunday, a congressional aide said, and planned to get it to the White House for consideration.
In addition to reorganising carmakers and protecting taxpayer investment, possible conditions include creating a government ”car czar” to oversee the bailout and additional concessions by the United Auto Workers (UAW) union as well as the corporate leadership.
The New York Times reported on Sunday that Democrats were considering having the ”car czar” lead an oversight board made up of five Cabinet secretaries and the head of the Environmental Protection Agency.
Negotiators are trying forge a Bill to provide General Motors, Chrysler and Ford with at least $15-billion in short-term loans, although analysts say the auto industry may eventually need closer to $125-billion to survive. The three firms had sought $34-billion from Congress.
Many from President George Bush’s Republican party are reluctant to approve another rescue plan after a $700-billion package they passed for Wall Street in October triggered a voter backlash in the November 4 congressional elections.
If the deal passes the Senate, it would go to the House of Representatives for anticipated concurrence.
The measure would then be sent to President George Bush as one of the last ones he signs into law before Democrat Barack Obama succeeds him as president on January 20.
Save the industry, says Obama
”I have said repeatedly that to allow the auto industry to collapse precisely at a time when we are seeing record joblessness in unacceptable,” Obama said in Chicago on Sunday.
Obama said the heads of the automakers ”should go” if they proved unwilling to make the tough choices needed to retool their operations to produce more fuel-efficient vehicles.
Critics of the rescue plan have said any loans would be a waste of money unless automakers were able to cut costs and better compete with more fuel-efficient, foreign-made cars.
Obama said lawmakers had been right in insisting on attaching conditions to the bailout money.
”I think that Congress is doing the exact right thing by asking for a conditions-based assistance package that holds the auto industry’s feet to the fire, gives them some short-term assistance, but also insists that that assistance leads to some very difficult choices involving all the stakeholders in the auto industry,” he said.
After months of stalled efforts to help the companies, the Bush administration and congressional Democrats made a breakthrough on Friday on how to pay for the bailout, agreeing the money will come from a loan programme approved in September to help carmakers make more fuel-efficient vehicles.
On the same day, the government reported that employers slashed more than 533 000 jobs in November, the highest monthly decline in 34 years. Lawmakers fear hundreds of thousands more would lose their jobs if any of the major automakers failed. – Reuters