Washington: Senate Democrats pressed ahead on Thursday with plans to vote next week on a $25 billion emergency loan plan for US carmakers as the auto industry and business groups readied a lobbying onslaught to overcome Republican opposition.
Senior Democrats are drafting legislation that would carve out part of the $700 billion Wall Street bailout for loans to the three major US auto companies in exchange for a government ownership stake in the companies.
They hope to push the measure through during a postelection session of Congress that begins Monday. General Motors Corp., Ford Motor Co. and Chrysler LLC are lobbying feverishly for Congress to approve the aid, citing an economic downturn that has choked off sales and frozen credit.
But the idea is running into resistance from Republicans and President George W. Bush, who are reluctant to back any additional money for the struggling industry. House Republicans leader John Boehner of Ohio issued a statement Thursday promising to oppose any new auto industry loans.
“Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers’ competitiveness around the world is neither fair to taxpayers nor sound fiscal policy,” Boehner said.
Senate Republican leader Mitch McConnell of Kentucky - home to a General Motors and two Ford plants - has been noncommittal about new aid. His office says Congress should instead speed release of $25 billion in loans approved by Congress last month to help automakers develop more fuel-efficient vehicles.
House Speaker Nancy Pelosi has yet to schedule a legislative session to consider the new loans as Democrats keep hunting for the votes to pass it.
Senate Majority Leader Harry Reid rejected that idea. His office said he would press forward with a still-unwritten measure next week.
With feelings still raw from the election and the public outraged about the Wall Street rescue, the auto proposal remains a tough sell. Some Senate Republicans have expressed skepticism that the aid would lead to changes for the companies that could make them viable in the long run.
Still, supporters of the auto bailout hope they can snag 12 to 15 Republicans to join with Democrats in pushing it through. They are targeting lawmakers who represent states with auto plants and auto suppliers, as well as Republicans in states with high unemployment rates.
Auto dealers, who have major political clout because their operations are spread across every congressional district, are preparing a major lobbying effort, as well as asking for additional help from Congress, such as new tax breaks for buying cars.
Auto suppliers that employ about 800,000 workers - with a big presence in states including Michigan, Missouri, Indiana, Kentucky and Tennessee - say they should get a piece of any new emergency loan package.
The legislation could set up a showdown during the president’s final days in office. Bush is open to helping the industry, the White House says, but the administration has expressed reservations about doling out more federal dollars to help the auto industry, or using the bailout money to do so.
The bill Democrats are writing would insert the government squarely into the car companies’ operations. It would require that the companies submit a plan for long-term viability in exchange for the loans, share a portion of future profits with the government and reimburse taxpayers before any other shareholder, according to aides familiar with it.
The car companies also would face tougher restrictions on awarding pay packages to executives and dividends to their shareholders than the financial companies that get a piece of the original bailout.