Congressional Democrats and the
White House yesterday settled on a plan to rush $15 billion in
emergency loans to the cash-strapped Detroit automakers and were working into
the night to resolve final disputes over the conditions the government should
attach to the money.
Under the plan, unveiled by Democratic leaders, the Treasury Department would cut checks for the car companies as
soon as next week. The proposal also calls for President Bush to name a "car czar" to manage a vast restructuring
of the firms and restore them to profitability.
Democrats bent to the will of the president on several key demands, most
notably in agreeing that the emergency funding would be drawn from an existing
loan program aimed at promoting fuel-efficient technologies.
Still, the White House objected yesterday to several elements of the
Democratic proposal, congressional aides said, including requirements that the
car companies notify Washington of any transaction of more than $25 million and
that they pull out of lawsuits against states seeking to enforce tougher
tailpipe-emissions standards.
Under the proposal, the car companies would be required to submit detailed
plans for restructuring by March 31, when they would be eligible for additional
government assistance. The Bush administration was pressing to strengthen those
provisions to make clear that only companies that were either financially viable
or taking steps to achieve viability could receive more federal cash.
In a statement, White House press secretary Dana Perino said the two sides had "made a lot of progress in
recent days" and that discussions were continuing over how to "help automakers
restructure and achieve long-term viability."
"Long-term financing must be conditioned on the principle that taxpayers
should only assist automakers executing a credible plan for long-term
viability," Perino said.
Appearing briefly before reporters, House Speaker Nancy Pelosi (D-Calif.) said Democrats, too, are determined to
force changes in the domestic auto industry, which had been losing customers to
more nimble foreign competitors even before a deepening recession slashed demand
for new cars to the lowest level in 25 years.
"Come March 31, it is our hope that there will be a viable automotive
industry in our country with transparency and accountability to the taxpayer. We
think that is possible," Pelosi said, adding that auto company executives, their
employees, their shareholders and their network of local dealers all will be
expected to make concessions.
"We call this a barbershop," Pelosi said. "Everyone is getting haircuts."
Talks continued late yesterday in Pelosi's Capitol Hill offices. Despite the
administration's last-minute objections, both sides remained optimistic that a
deal could be finalized and quickly presented to lawmakers for a vote.
"It is overwhelmingly likely that a bill will be on the
president's desk by the end of the week," said Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, whose staff was taking the
lead in drafting the measure.
