House passes auto rescue; Senate in doubt
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WASHINGTON -- The House last night passed a $14 billion bailout for U.S. automakers after the White House and Democratic leaders finalized a deal empowering a government "car czar" to force the companies into bankruptcy by spring if they don't restructure.
But the fate of the plan -- and of some of the nation's most storied companies and brand names -- remained uncertain because of deep-seated Republican opposition in the Senate, where Democrats cannot pass the bill without GOP help.
Supporters -- including administration officials, Democratic congressional leaders and many independent economists -- warned that hundreds of thousands of jobs could be lost and hundreds of related businesses damaged or destroyed if one or more of the U.S. automakers failed. "The consequences of defeating this bill would be disaster for the economy that is already in trouble," House Financial Services Committee Chairman Barney Frank, D-Mass., told his colleagues during the debate.
The vote was 237-170, with 32 Republicans and 205 Democrats voting for the bill.
Among Western Pennsylvania lawmakers, the bill was supported by Reps. Jason Altmire, D-McCandless; Mike Doyle, D-Forest Hills; Phil English, R-Erie; Tim Murphy, R-Upper St. Clair; and John Murtha, D-Johnstown. It was opposed by Rep. Bill Shuster, R-Blair. Rep. John Peterson, R-Venango, was listed as not voting.
"The collapse of even one of America's Big Three automakers could cost thousands of Pennsylvanians -- and millions of Americans -- their jobs," said Mr. Altmire. "Doing nothing, and seeing one or all of the Big Three automakers fail, would be far costlier to taxpayers than providing the industry with a $14 billion loan, which they will have to repay with interest."
The White House dispatched Vice President Dick Cheney, Chief of Staff Josh Bolten and top economic adviser Edward Lazear to Capitol Hill to sell the deal, but they were barraged by questions during a two-hour, closed-door meeting and failed to secure much, if any, support, senators said.
"People are rightly concerned that the automakers and unions won't follow through. Many simply don't believe that the changes that need to be made will be made," Sen. John Sununu, R-N.H., said after meeting. He said Mr. Cheney, Mr. Bolten and Mr. Lazear acknowledged that the bill wasn't as strong as they would have liked, but urged GOP lawmakers to support it.
Many Republicans are weary of government bailouts and worry that providing money to automakers will lead other industries to seek aid. Many on Capitol Hill also are convinced that they should have attached more strings to the $700 billion Wall Street bailout.
A central goal of White House and congressional negotiators has been to design a bill tough enough on the Detroit automakers and United Auto Workers Union to pass muster in Congress.
Days ago, negotiators slashed the $34 billion requested by the Big Three executives to a more modest stopgap fund -- just big enough to keep General Motors and Chrysler afloat until spring. Negotiators also agreed to create a federal monitor, appointed by the president, to oversee the companies' efforts to restructure their operations to assure future viability.
Senate Democrats aimed to have a vote by week's end.
In the final stages of the negotiations, the presidentially appointed monitor was given authority to act as a de facto bankruptcy judge with great power over the operations and future shape of companies accepting government aid.
GM has said it needs $10 billion to make it until March 31, and Chrysler has asked for $4 billion. Ford has said it does not need emergency loans at this point, but it's unclear if it will participate in the government-supervised restructuring to get money later.
If the restructuring plans don't meet standards set out in the bill for assuring viability, the government would be required to recall a company's loan, which would almost certainly trigger bankruptcy.
In the Senate, Democrats hold a narrow 50-49 majority, and they need at least 10 Republicans to vote for the bailout to overcome procedural hurdles.
First Published December 11, 2008 10:55 am