Democrats push for automaker rescue; GOP largely opposed
WASHINGTON - Hardline opponents of an auto industry bailout branded the industry a "dinosaur" whose "day of reckoning" is near, while Democrats pledged yesterday to do their best to get Detroit a slice of the $700 billion Wall Street rescue in this week's lame-duck session of Congress.
The companies seek $25 billion from the financial industry bailout for emergency loans, though supporters of aiding General Motors Corp., Ford Motor Co., and Chrysler LLC have offered to reduce the size of the rescue to win Congress's backing.
Senate Democrats intended today to attach an auto bailout to a House-passed bill extending unemployment benefits; a vote was expected as early as Wednesday. A White House alternative would let the car companies take $25 billion in loans previously approved to develop fuel-efficient vehicles and use the money for more immediate needs. Democrats oppose the White House plan as shortsighted.
Republican senators Richard Shelby of Alabama and Jon Kyl of Arizona said it would be a mistake to use any of the Wall Street rescue money to prop up the automakers because a bailout would only postpone the industry's demise.
"Companies fail everyday and others take their place. I think this is a road we should not go down," said Shelby. "They're not building the right products. They've got good workers but I don't believe they've got good management. They don't innovate. They're a dinosaur in a sense."
House Speaker Nancy Pelosi, a California Democrat, said the House would aid the ailing industry, though she did not put a price on her plan.
"The House is ready to do it," said Democratic Representative Barney Frank of Massachusetts. "There's no downside to trying."
It is a more difficult fight in the Senate, given the Democrats' slim edge and President Bush's opposition. Bush wants to speed the release of $25 billion from a separate loan program intended to help the automakers develop fuel-efficient vehicles. The loan program was approved by Congress last year, but more legislation would be necessary to change its purpose.
The disagreement raises the possibility any help for automakers will have to wait until President-elect Barack Obama takes office and Democrats increase their majority in the Senate.
Sen. Carl Levin, Democrat of Michigan, said automakers are working to adapt but need immediate help to survive the current economic crisis. "This is a national problem," Levin said. "The auto industry touches millions and millions of lives."