US Senate to debate measure with US$25b in loans to auto industry

Source: Agencies  |   2008-11-15  |     ONLINE EDITION

RUNNING Running out of time and scrambling for votes, supporters of a US$25 billion government bailout for the teetering US automotive industry offered yesterday to scale down the rescue package in the face of an uphill fight in Congress and determined opposition from the White House.

Battered by an economic meltdown that choked off sales and froze credit, General Motors Corp., Ford Motor Co., and Chrysler LLC are seeking an emergency infusion of cash. GM is spending down its operating cash at a rate of US$3.1 million an hour and has warned it might not survive through year's end without a government lifeline.

The White House rejected using any of the US$700 billion designated for the financial meltdown, setting up what could be the last showdown between President George W. Bush and the Democratic Congress. "Democrats are choosing a path that would only lead to partisan gridlock," White House press secretary Dana Perino said.

Despite Bush's opposition, the measure gained important ground among Republicans on Capitol Hill, where the votes of at least a dozen of the party's senators will be needed to prevent opponents from blocking the legislation in the Senate. The crucial vote on that could occur as early as next Wednesday.

Senator Kit Bond of Missouri became the second Republican to voice publicly his support for the idea, joining Senator George Voinovich of Ohio. Both states have major auto plants. Several other of the minority party's senators signaled they might accept a rescue for Detroit's Big Three if it contained strict conditions for the beleaguered companies, including management and salary changes, concessions from their powerful unions, and a commitment to making more fuel-efficient vehicles.