Work on Bailout Continues Through Weekend

Posted December 6, 2008 at 11:42am

Details were starting to emerge Saturday on the package being crafted by Congress and the White House aimed at keeping the nation’s car manufacturers from sinking into bankruptcy. Congressional leaders are planning to unveil draft legislation Monday that would provide approximately $15 billion in short-term aid to the beleaguered auto industry, with a larger bailout likely next year. News reports have indicated the package will total $15 billion, but senior aides said the figure is still in flux. The funds are designed to prop up the car manufacturers through the end of March. House Financial Services Chairman Barney Frank (D-Mass.) and Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) are working through the weekend to draft the measure. The bill will include oversight provisions to ensure that automakers use the funds as intended. Speaker Nancy Pelosi (D-Calif.) is also pushing for a provision that would prevent automakers from using any of the funds for pursuing lawsuits against states seeking tougher emission standards. A senior House Democratic aide emphasized that while the general framework of the deal is in place, it is still “really uncertain” how the oversight, emission and repayment aspects will play out. The issue of how to aid auto manufacturers appeared at a standstill until Pelosi made a major concession to the White House: on Friday, she dropped her objection to tapping into an existing loan fund for fuel-efficient vehicles. Democrats had been pushing to draw funds from the $700 billion financial industry bailout. In giving ground, Pelosi insisted that those funds be replaced “within a matter of weeks.” Democrats are hoping to replace the funds in a multibillion-dollar economic stimulus package on tap for January. The White House reiterated Saturday that no money should go to the Big Three automakers unless it is clear it will be returned. “Taxpayers should not be asked to finance assistance for automakers without a strong likelihood that they will be paid back,” White House spokeswoman Dana Perino said in a statement. Perino said the White House is having “constructive discussions” with Congress and hopes they will “continue to make progress.”