Looks like the automakers will be getting some help. Then when Obama comes he will give them even more help as he is in support of the bailout.
White House: Constructive auto talks with Congress
Saturday December 6, 11:38 am ET
By Julie Hirschfeld Davis, Associated Press Writer
White House says auto talks are constructive, rejects using Wall Street rescue for Big 3
WASHINGTON (AP) -- Facing massive job losses, the White House and congressional Democrats are negotiating a deal to provide about $15 billion in loans to prevent Detroit's weakened auto industry from collapsing.
The White House said it was in "constructive discussions" with lawmakers in both parties to dole out the assistance as House and Senate staff aides worked through the weekend drafting bailout legislation that is expected to come to a vote next week.
A breakthrough on the long-stalled rescue came Friday when House Speaker Nancy Pelosi, D-Calif, yielded to President George W. Bush on a key point: allowing the aid to be drawn from a 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 before Bush left Washington to attend the Army-Navy football game in Philadelphia.
Pelosi said the House would consider legislation in the upcoming week to provide "short-term and limited assistance" to the U.S. auto industry while it undergoes "major restructuring."
"Congress will insist that any legislation include rigorous and ongoing oversight to guarantee that taxpayers are protected and that resources are directed to ensure the long-term viability and competitiveness" of the industry, she said in a statement Friday. The Senate is also scheduled to be in session next week.
The legislation being developed this weekend would act as a lifeline to General Motors Corp., Ford Motor Co. and Chrysler LLC while meeting demands from many skeptical lawmakers that Congress refrain from writing a blank check for the beleaguered industry.
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 refused 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 spoke to White House chief of staff Josh Bolten on Friday to signal her change in position, several officials in both parties said.
She said the billions of dollars set aside to modernize plants and develop green cars would be repaid "within a matter of weeks." Democrats said her hope was to include the funds in an economic recovery bill that lawmakers are expected to prepare for President-elect Barack Obama shortly after he takes office Jan. 20.
Officials in both parties said the legislation would include creation of a trustee or group of industry overseers to make sure the bailout funds were used by automakers for their intended purpose. The funds are designed to last until March, giving the incoming Obama administration and the new Congress time to consider the issue anew.
One senior Democratic aide said Pelosi wanted to bar the automakers from using any of the funds to pursue a legal challenge to states seeking to put in place tougher auto emission standards. The aide spoke on condition of anonymity because the legislation was not yet drafted.
The discussions came hours after the government reported that employers slashed 533,000 jobs in November, the worst single month's job loss in 34 years. Bush warned that at least one of the automakers might become a casualty of the severe economic crisis.
Top executives from the Detroit automakers spent two consecutive days on Capitol Hill pleading for $34 billion in loans to help the industry survive. GM and Chrysler said they needed a combined $15 billion to help them maintain their operations through early 2009. Ford wants access to a line of credit of up to $9 billion but only if market conditions deteriorate.
Detroit's automakers employ nearly a quarter-million workers, and more than 730,000 others produce materials and parts for cars. If just one of the automakers should declare bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.
Associated Press writers David Espo, Ken Thomas and Ben Feller contributed to this report.
