US auto rescue plan stalls in Senate

US auto rescue plan stalls in Senate
AFP
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First Published: Fri, Dec 12 2008. 08 55 AM IST
Updated: Fri, Dec 12 2008. 08 55 AM IST
Washington: US lawmakers were locked in tough negotiations on Thursday to salvage a multi-billion-dollar bailout loan for teetering US automakers amid strong opposition from Senate Republicans.
With Republicans reluctant to dish out public money to rescue private companies, Democrats said the Senate was considering alternatives to the $14 billion package and hoped for a vote late on Thursday.
Democratic Senate Majority Leader Harry Reid said a compromise was being presented to Republican senators.
“It’s been a difficult negotiation,” said Reid adding that he was “hopeful that we can finish this matter tonight.”
The House of Representatives passed its version of the rescue plan for Detroit’s automakers Wednesday, but Republican opposition in the Senate sent lawmakers hustling to make adjustments.
Meanwhile, the largest US automaker General Motors, which has warned lawmakers it was on the brink of collapse, acknowledged it was considering “all options,” including bankruptcy, and had hired a team of legal advisers.
The bill that passed the House this week, resulting from an alliance between the White House and congressional Democrats who hold the majority, would require a major restructuring of GM and Chrysler in exchange for short-term loans.
The legislation would provide GM and Chrysler bridge loans to operate until March 31, the date by which they must have crafted a restructuring plan that ensures their long-term survival while repaying government aid.
The bill also requires the president to name a special designee, popularly called a “car czar” or “autocrat,” who would oversee the process.
If that official deemed that the long-term plans failed to ensure a firm’s viability, he could push the company into bankruptcy proceedings.
Some foes of the plan have said the automakers must simply bear the burden of bad business decisions and declare bankruptcy.
Bush and president-elect Barack Obama both warned that the US economy could not afford more sweeping job losses.
Obama, who takes office January 20, said Washington must provide short-term help to the stumbling US auto giants “while holding the companies accountable and protecting taxpayer interests” and called the legislation “an important step in that direction.”
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First Published: Fri, Dec 12 2008. 08 55 AM IST
More Topics: US | Auto | Bailout | Economy | Politics |