Senate could block aid for troubled car firms

By John Crawley  |   2008-12-11  |     NEWSPAPER EDITION

A VOTE in the United States House of Representatives on a US$15-billion plan to bail out and restructure US auto makers could face Republican roadblocks in the Senate.

The White House and congressional Democrats are seeking to quickly finalize an agreement in principle struck on Tuesday night on conditions for providing US$15 billion in low-interest loans to avert a threatened industry collapse if one or more of "The Big Three" auto makers were to fail.

But some issues remain unresolved, apparently including a Democratic demand that auto makers drop lawsuits against states seeking to reduce tailpipe pollution.

"Still no deal/bill," a Senate Republican leadership aide wrote in an e-mail to Reuters. "Bill mostly written," e-mailed a Democratic leadership aide. "A couple of outstanding issues. More to come" later in the day.

Democratic aides said negotiators, following days of marathon talks, wanted to go over any proposed bill "line by line" before announcing any final accord.

Yet Democratic Senator Carl Levin of Michigan, whose home state is headquarters to General Motors, Ford and Chrysler, declared victory late on Tuesday after word of a breakthrough.

"I understand an agreement has been reached," Levin said. He urged George W. Bush and Barack Obama to help rally support. A Bush administration official said late on Tuesday that negotiators satisfied the key White House concern in the talks that companies receiving aid obtain the necessary concessions and make other changes to prove they can survive and compete.

In addition to providing loans, the proposal would force auto makers to answer to a presidentially appointed trustee - or "car czar" - and make the government their biggest shareholder.

Democrats control Congress and are expected to be able to push a bill through the House.

But they may run into trouble in the Senate where Republicans could raise a roadblock that would take 60 votes to clear.