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Detroit Driving Lame Duck II

Automakers Rework Bailout

Jet-setting CEOs and a policy dispute between Speaker Nancy Pelosi (D-Calif.) and President George W. Bush helped scuttle a $25 billion automaker bailout in a bust of a lame-duck session this week, but leaders plan to return Dec. 8 for another try.

Rank-and-file lawmakers, already taking a beating for the $700 billion Wall Street bailout, had a collective gag reflex to voting on a bailout for auto companies, and it didn’t help when well-paid executives arrived on private jets for Congressional hearings to ask for a taxpayer handout.

At the same time, few are dismissing a bailout wholesale, worried about being blamed for losing thousands of jobs in the midst of a recession.

Pelosi and Senate Majority Leader Harry Reid (D-Nev.) called on the auto companies to present a plan by Dec. 2 for long-term viability for their industry, setting up a potential return of the lame-duck Congress, which so far has managed only an extension of unemployment benefits in the Senate and has yet to vote on so much as a post office naming in the House.

“Until we see the plan, we cannot show them the money,” Pelosi said.

“We can only help if they are willing to help themselves,” Reid added. Reid declined to bring up a bipartisan $25 billion bill unveiled by lawmakers from auto manufacturing states, or any other proposal. “We want them to get their act together.”

Pelosi and Reid earlier asked the Bush administration to use money from the Wall Street bailout to rescue the automakers, which the administration has emphatically ruled out.

The administration has supported boosting the automakers by raiding a $25 billion program to build fuel-efficient vehicles; Pelosi has shot that idea down, and that remains the biggest barrier to getting a deal.

Punting the issue until December gives Pelosi and other Democratic leaders time to craft legislation that could include other carrots to assuage environmentalists and the public, as well as more time for the pressure to build on reluctant lawmakers.

And requiring the auto companies to come back to the table puts pressure on the companies to propose concessions and accountability measures that would give lawmakers more political cover.

“That time will help us build consensus in Congress and instill public confidence in the car companies’ future,” House Majority Leader Steny Hoyer (D-Md.) said.

Auto-state lawmakers said they were disappointed and surprised that Reid declined to push for a vote on their proposal this week, arguing they had a reasonable shot at passing it. It would have used the Bush administration idea of tapping the fuel- efficiency money but sought to appease environmental concerns by requiring any payments and interest under the loans be used to replenish the fuel-efficiency account. It also would include taxpayer protections limiting executive pay and require the Commerce Department to sign off on the automakers’ plans to use the money before it would be loaned.

It also allowed auto suppliers to receive some of the loans.

Despite the disappointment on the lack of a deal, Sen. Sherrod Brown (D-Ohio), part of the bipartisan auto group, said the delay might ultimately result in the best outcome. “It looked like it was dead” earlier in the week, he said. “This keeps the ball going down the field.”

“Now this is right smack in the Congress’ lap,” Sen. Carl Levin (D-Mich.) said, adding that leaders did not think they had the votes to pass the bill this week. He also praised the Democratic leadership’s commitment to saving the industry from bankruptcy.

But Sen. George Voinovich (R-Ohio) said he was concerned that if action is delayed, “we just might go over the cliff.”

And Sen. Kit Bond (R-Mo.), another backer of the bailout, suggested that the automakers put into their plans the sale of their corporate jets. “Just a suggestion.”

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