Frank, Dodd speak on possible auto deal

The two New England lawmakers who presided over hearings last week on federal aid for the auto industry said today that while it's not their ideal choice, they're in favor of taking money from an already-approved $25 billion fund to help US automakers retool to build fuel-efficient vehicles.

But they said they expect that money to be replenished soon after President-elect Barack Obama takes office.

"But in the interim, we will be extending loans, the federal government will be protected," Representative Barney Frank of Massachusetts, chairman of the House Financial Services Committee, said on CNBC.

"It will be a very high degree of assurance that we'll be paid back. There will be requirements that they begin soon to do the restructuring that people think is necessary. And it will probably be enough money to get them until March. And the reason for that is you then get the new administration, the Obama administration, able to take it up from there and make longer range projections."

Senator Chris Dodd of Connecticut, chairman of the Senate Banking Committee, said on MSNBC that it would only take $7 billion of the $25 billion already approved to leverage $15 billion in loans.

"This is a literally, a bridge," Dodd said. "I know people don't like that analogy, but if we don't provide some funding in the next few days, literally we could be looking at an industry that no longer exists come early January. So we need to be in a position to be able to get to the point of restructuring this industry almost from top to bottom. And what we're trying to do is provide the funding that will allow us to do it."

The White House said today that it was "very likely" to reach a deal with congressional leaders, but asked for more details on the proposal.

"It sounds like we have agreement on those basic principles that would be required for a bill that the president could sign," White House press secretary Dana Perino told reporters.

House Speaker Nancy Pelosi, responding to a report of more than 500,000 lost jobs last month, broke the logjam on Friday by agreeing to dip into the fuel-efficient vehicle money.