The Bush administration, acting after the rejection of a $14 billion loan package for the nation's auto industry, said yesterday it would provide other financial help to carmakers to avoid potential economic chaos that would follow their demise.

A possible source of the aid is the $700 billion Wall Street bailout fund. President George W. Bush had opposed using it, but the defeat of the loan package in Congress on Thursday left the Troubled Assets Relief Program, or TARP, as virtually the only option short of bankruptcy.

"The current weakened state of the economy is such that it could not withstand a body blow like a disorderly bankruptcy in the auto industry," said White House press secretary Dana Perino.

Some $15 billion remains undesignated from the first half of the $700 billion financial institutions bailout, and using those funds would not require congressional approval.

General Motors and Chrysler LLC have warned that they could run out of the cash they need to operate within weeks.

It's unclear when the money would be provided to the industry or when an official decision by the Treasury Department would be announced. But in a conference call yesterday, Pennsylvania Democratic Sen. Bob Casey Jr. said it likely would be provided on a short-term basis to tide the companies over for a few months. He said he hoped that the details and approval of the Treasury proposal would come within a day or two.

The thinking in Washington has been that the Obama administration, which takes over Jan. 20, and Congress will be able to come up with a more workable long-range solution to the auto companies' woes.

A number of analysts yesterday agreed that tapping the bailout fund was just about the only step left short of bankruptcy, an action many believe would result in the loss of as many as 3 million jobs, including more than 120,000 in Pennsylvania in businesses directly and indirectly tied to the auto industry.

"Right now, there seem to be only two options, according to the official view," said George Magliano, director of automotive research at Global Insight, a Lexington, Mass.-based firm. "We either get money out of TARP, either with no strings attached or in terms of some concessions, or they face bankruptcy. I know that both GM and Chrysler have hired bankruptcy lawyers and advisers at this point in time. Obviously, there's a lot of urgency here."

In separate statements, Chrysler and GM both expressed disappointment at the defeat of the $14 billion package in the Senate but voiced optimism from the administration that help may be on the way.

"Despite this setback, we will continue to make our case in Washington that an immediate, short-term bridge loan is critical for Chrysler to survive the current financial crisis, and it is just as important to the health of the overall American economy," said Chrysler Chief Executive Officer Bob Nardelli.

He said the company will maintain discussions with the White House and Treasury, and will continue to seek funding options for Chrysler and Chrysler Financial through existing programs like TARP.

In its statement, GM said it was encouraged by the White House's willingness to consider other options, including the TARP program, for immediate aid to the domestic auto industry. "We are prepared to work closely with the administration on possible solutions that could prevent further damage to our nation's economy and also allow us to embark on an aggressive restructuring plan for long-term viability," the statement said.

The White House issued a statement explaining its position shift, saying use of the already-appropriated funds presented the best chance to avoid a disorderly bankruptcy, while ensuring that taxpayer funds go only to firms whose stakeholders are prepared to make difficult decisions needed to become viable and competitive.

"Under normal economic conditions, we would prefer that markets determine the ultimate fate of private firms," Ms. Perino said. "A precipitous collapse of this industry would have a severe impact of our economy, and it would be irresponsible to further weaken and destabilize our economy at this time."

Opposition to using TARP to bail out automakers surfaced quickly yesterday.

Pennsylvania's Rep. Tim Murphy, R-Upper St. Clair, said, "Allowing the Big Three access to $700 billion, with no requirements to restructure to become viable -- with no requirements for concessions from either the United Auto Workers or from the auto execs or from any of the stakeholders that led this industry to the brink of collapse -- is foolhardy." Mr. Murphy said he supported a loan with strict terms and conditions, but not a bailout.

Rebecca Lindland, associate director of automotive research at Global Insight, likened the latest proposal to a $15 billion football being punted to the Obama administration. "We were generally in favor of the Senate bill," she said. "It addressed some viability issues for the manufacturers, their debt, their wage responsibilities and health care benefits responsibilities, and let them restructure their companies without going bankrupt. It was the best of both worlds."

By comparison, it's not clear what strings, if any, might be attached to the new proposal, she said. "It opens up a can of worms from other industries, allowing them to say, 'Hey, what about me?' "

There are other proposals under consideration, including one that would give the $15 billion in TARP funds to a group of eligible banks and allow them to lend the money to GM and Chrysler with government-backed guarantees. But everything now under consideration is just a short-term fix, said Ms. Lindland.

"I think it's a terrible idea," said University of Maryland business professor Peter Morici, who follows the auto industry closely. He would like to see the automakers plan a prepackaged Chapter 11 bankruptcy reorganization.

Mr. Morici said a bankruptcy judge "could act in the best interest of creditors [and] force a settlement between the United Auto Workers and the auto companies." He thinks a "car czar," a new government-appointed position that has been proposed to oversee the industry, would get bogged down in negotiations with the union.

Others said bankruptcy is not the answer because there's no guarantee the automakers could obtain the necessary financing to pay for continuing operations while restructuring, particularly at a time when credit markets are practically closed.

In the wake of Thursday's defeat of the proposed bailout, there were plenty of barbs traded. While some were critical of the president's shift toward using TARP funds, one industry group accused Sen. Bob Corker, R-Tenn., of working to bring foreign-owned automakers to his home state while opposing help for U.S. companies.Mr. Casey, who said he was "beyond disappointment" over the failed plan, said: "Those beating their chest and saying there should be no public money spent for all this need to know that the cost of not spending $14 billion now is that we could spend tens of billions, if not hundreds of billions, of dollars on unemployment compensation and other things.

"It's kind of penny-wise and pound foolish," he said.