Bailout plan could soon face House vote
The House of Representatives could vote as early as Wednesday on a $15 billion plan to bail out and restructure U.S. automakers but the initiative may face possible roadblocks in the Senate, officials said.
The White House and congressional Democrats sought to quickly finalize an agreement in principle struck Tuesday night on conditions for providing low interest loans to avert a threatened industry collapse if one or more of the Detroit Three automakers were to fail.
“Bipartisan hard work has paid off,” said Democratic Sen. Carl Levin of Michigan whose home state headquarters General Motors Corp Ford Motor Co and Chrysler LLC.
“I understand an agreement has been reached,” Levin said in a statement.
President George W. Bush and President-elect Barack Obama were both urged by a key lawmaker to help rally support by Democrats and Republicans for the pending measure.
A Bush administration official said the 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 automakers to answer to a presidentially appointed trustee — or “car czar” — and make the government their biggest shareholder.
The overseer will have powers to shape a restructuring of the companies, withholding further loans if progress toward a turnaround stalled car insurance.
A key provision would permit the czar to recommend a bankruptcy restructuring if companies borrowing money fail to obtain the necessary concessions.
KEY CONDITIONS
Some Republicans wanted some sort of bankruptcy option included as an incentive for labor and other stakeholders to agree on givebacks.
Among issues raised by Republicans is the use of taxpayer money in the case of Chrysler, which is owned by private equity firm Cerberus Capital Management. During the talks, Democratic aides said the Bush administration resisted a bid to hold Cerberus liable for repayment if the auto company defaulted on any government loan.
The administration official, who spoke on the condition that he not be identified because the deal had not been finalized, would not comment on specific companies so it remains unclear if that matter still needs to be cleared up.
Additionally, the administration still opposes a Democratic bid to force automakers to drop lawsuits against California and other states seeking to cut auto emissions and other greenhouse gases.
The administration official said it was his expectation the bill will not succeed unless that provision is struck.