White House, Congress agree on outlines of auto bailout plan
WASHINGTON (AFP) - - The White House indicated an agreement in principle was in place with Congressional leaders on a 15-billion-dollar automotive industry rescue package, but said negotiations were not yet over.
"We will continue to work with Congress to finalize legislation the president can support," said White House spokeswoman Dana Perino.
However, "a great deal of progress has been made," she said of the legislation to shore up the ailing Detroit Big Three -- General Motors, Ford and Chrysler.
Senator Carl Levin from Michigan, the base for the auto industry, said he understands that an "agreement has been reached," and that it was only a matter of time before a bill is ready to go.
"This gets us to the 20 yard line, but getting over the goal line will take a major effort," he said.
A senior administration official said the main point for the White House is certifying the companies can prove they are "viable" and that taxpayers wouldn't foot the bill for a fresh round of loans in coming months.
The White House also emphasized the need for a designee or "car czar" to oversee the billions in funds and to ensure the companies fulfill their restructuring plans.
If the designee establishes a company has been unable to do so, the government can withdraw federal funds, the senior administration officials said.
Congressional Republicans, however, have expressed angst about an open-ended commitment to rescue the firms from their own managerial mistakes.
"Taxpayers should not be asked to finance any firm unwilling to make the difficult decisions across the scope of their businesses," Perino said, warning that dramatic restructuring includes "deep and meaningful concessions from all stakeholders" in the companies.
Earlier Tuesday, Perino stressed: "Our insistence that long-term viability be reflected in the legislation is something that we have held very strong feelings about, and that has not changed.
"There will not be long-term financing if they cannot prove long-term viability."
Short-term loans of 15 billion dollars are meant to sustain the car giants through March, allowing president-elect Barack Obama time to address their crisis after he takes office on January 20.
Obama has called a collapse of the auto industry "unacceptable," but said Sunday he wanted a supervisory process that would hold the companies' "feet to the fire."
GM and Chrysler are first in line after warning they are fast running out of cash. Ford, though equally hampered by slumping sales, says it faces no immediate liquidity crisis but wants a nine-billion-dollar line of credit.
While the Democratic-led Congress was ready to extend a larger amount of aid, the Bush administration has balked at giving any more than 15 billion dollars and insists -- like Obama -- that the automakers must retool for the long haul.
White House and congressional negotiators held talks late into Monday and the emerging total proposed is less than half of the 34 billion dollars the auto giants say they would need to stave off a "catastrophic collapse."
House of Representatives Speaker Nancy Pelosi said the automakers must be "preserved" as it was "essential to our national security that we have a strong industrial and manufacturing base."
But government help must not amount to "corporate welfare," she told reporters, mentioning former Federal Reserve chairman Paul Volcker as a possible presidential czar to supervise the companies' restructuring.
Influential Republican Senator Richard Shelby, whose state of Alabama hosts assembly plants of Toyota, Honda, Hyundai and Mercedes-Benz, said many in his party were grumbling at the helping hand being offered to the Detroit giants.
Republicans in Congress could not sign off any deal "because I believe the American people need to know the details of this, to realize this is only the downpayment on a lot of money to come in the future," he told MSNBC.
The proposed legislation calls for the "car czar," a presidential appointee to oversee the overhaul of the Big Three US automakers, which have been losing ground for years to their Japanese rivals.
In return for the loans, the government would get an equity stake and the automakers would have to improve their fleets' fuel-efficiency and also examine using their excess capacity to build bus and rail cars for public transit.
The bill also requires the automakers to sell their private jets and places strict limits on executive compensation, similar to a recent bailout for financial firms buffeted by the global credit crunch and toxic mortgage loans.
WASHINGTON (AFP) - - The White House indicated an agreement in principle was in place with Congressional leaders on a 15-billion-dollar automotive industry rescue package, but said negotiations were not yet over.
"We will continue to work with Congress to finalize legislation the president can support," said White House spokeswoman Dana Perino.
However, "a great deal of progress has been made," she said of the legislation to shore up the ailing Detroit Big Three -- General Motors, Ford and Chrysler.
Senator Carl Levin from Michigan, the base for the auto industry, said he understands that an "agreement has been reached," and that it was only a matter of time before a bill is ready to go.
"This gets us to the 20 yard line, but getting over the goal line will take a major effort," he said.
A senior administration official said the main point for the White House is certifying the companies can prove they are "viable" and that taxpayers wouldn't foot the bill for a fresh round of loans in coming months.
The White House also emphasized the need for a designee or "car czar" to oversee the billions in funds and to ensure the companies fulfill their restructuring plans.
If the designee establishes a company has been unable to do so, the government can withdraw federal funds, the senior administration officials said.
Congressional Republicans, however, have expressed angst about an open-ended commitment to rescue the firms from their own managerial mistakes.
"Taxpayers should not be asked to finance any firm unwilling to make the difficult decisions across the scope of their businesses," Perino said, warning that dramatic restructuring includes "deep and meaningful concessions from all stakeholders" in the companies.
Earlier Tuesday, Perino stressed: "Our insistence that long-term viability be reflected in the legislation is something that we have held very strong feelings about, and that has not changed.
"There will not be long-term financing if they cannot prove long-term viability."
Short-term loans of 15 billion dollars are meant to sustain the car giants through March, allowing president-elect Barack Obama time to address their crisis after he takes office on January 20.
Obama has called a collapse of the auto industry "unacceptable," but said Sunday he wanted a supervisory process that would hold the companies' "feet to the fire."
GM and Chrysler are first in line after warning they are fast running out of cash. Ford, though equally hampered by slumping sales, says it faces no immediate liquidity crisis but wants a nine-billion-dollar line of credit.
While the Democratic-led Congress was ready to extend a larger amount of aid, the Bush administration has balked at giving any more than 15 billion dollars and insists -- like Obama -- that the automakers must retool for the long haul.
White House and congressional negotiators held talks late into Monday and the emerging total proposed is less than half of the 34 billion dollars the auto giants say they would need to stave off a "catastrophic collapse."
House of Representatives Speaker Nancy Pelosi said the automakers must be "preserved" as it was "essential to our national security that we have a strong industrial and manufacturing base."
But government help must not amount to "corporate welfare," she told reporters, mentioning former Federal Reserve chairman Paul Volcker as a possible presidential czar to supervise the companies' restructuring.
Influential Republican Senator Richard Shelby, whose state of Alabama hosts assembly plants of Toyota, Honda, Hyundai and Mercedes-Benz, said many in his party were grumbling at the helping hand being offered to the Detroit giants.
Republicans in Congress could not sign off any deal "because I believe the American people need to know the details of this, to realize this is only the downpayment on a lot of money to come in the future," he told MSNBC.
The proposed legislation calls for the "car czar," a presidential appointee to oversee the overhaul of the Big Three US automakers, which have been losing ground for years to their Japanese rivals.
In return for the loans, the government would get an equity stake and the automakers would have to improve their fleets' fuel-efficiency and also examine using their excess capacity to build bus and rail cars for public transit.
The bill also requires the automakers to sell their private jets and places strict limits on executive compensation, similar to a recent bailout for financial firms buffeted by the global credit crunch and toxic mortgage loans.
