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Auto Relief Runs Out of Gas

Updated 11:48 p.m.

Senate negotiations on an auto industry bailout fell apart Thursday night, after a marathon bipartisan negotiating session ended in a stalemate.

The Senate effectively killed the measure for the year by voting, 52-35, late Thursday night on a bill that was intended to serve as the vehicle for any compromise. Sixty votes were needed to beat back what ended up being a GOP-led filibuster.

Ten Republicans voted with a majority of Democrats to move forward with the bill.

Three Democrats voted against moving forward, along with Senate Majority Leader Harry Reid (D-Nev.), who only voted no in order to preserve his right to call a vote to reconsider if it appears the votes change in the next week or so.

After the vote, Republicans and Democrats said they now believe that Treasury Secretary Henry Paulson will be compelled to extend loans to the automakers using money from the financial industry rescue package passed in October. Paulson and the Bush White House have flatly refused to do so up until now, but Members of both parties said the imminent collapse of Chrysler and General Motors Corp. will likely force the administration’s hand in the absence of Congressional action.

In the Senate, the two sides got bogged down on the issue of whether to force union autoworkers who work at domestic-owned plants to reduce their pay to the level of workers at foreign-owned plants in the United States.

Reid said the two sides were unable to bridge the divide, but he praised Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) and Sen. Bob Corker (R-Tenn.) – whose proposal served as the basis for Thursday’s talks – for trying to forge a compromise that reluctant Republicans, as well as union leaders, could accept.

“We are not going to be able to do something,” Reid said on the floor. “I think the manner in which we proceeded with this – led by Sen. Corker on the Republican side – has been extremely good. … I think it is going to work well next year.”

After a full day of negotiations, Corker took the autoworker wage issue to a hastily called meeting of the Senate Republican Conference at 8:45 p.m. But when GOP Senators emerged after 10 p.m., it was clear a deal was not in the offing.

Though Corker and the Republicans were willing to push their original March 31 date for changing the autoworkers’ pay scales to the end of 2009, GOP Senators said union representatives were holding out for a 2011 date and language that would give them more discretion to keep wages above those of workers at foreign-owned plants.

“This has been a challenging exercise for everyone involved on both sides,” Minority Leader Mitch McConnell (R-Ky.) said. McConnell, who called the original proposal brokered by Democrats and the White House “unacceptable” for Republicans, also praised Corker.

“Into this breach stepped the junior Senator from Tennessee, who I must say has made an extraordinary impact in a very small amount of time,” he said.

Democrats and Republicans were essentially in agreement that automakers should be given immediate access to $14 billion in loans. They also appeared settled on including another part of Corker’s proposal, which would force bondholders to write down auto companies’ debt.

Republicans essentially blamed the unions for balking at bringing down their pay.

“I think getting Republicans to vote for something that is considered to be some sort of a rescue package or bailout for this industry right now is a very heavy lift absent some of these reforms right now,” Sen. John Thune (R-S.D.) said. “So far everybody’s given something here except the unions.”

But Democrats placed the blame squarely on Republicans, who had refused to negotiate on the bill when Democrats and the White House renewed talks late last week.

“Somehow workers get paid too much in this country, and unless we sock it to the worker, [Republicans] will not be willing to allow a $14 billion bridge loan to be able to save an industry,” Sen. Debbie Stabenow (D-Mich.) said. “There are those who think they can play games with this, and there are no consequences. … It’s not about auto executives versus workers. This is about the economy of our country.”

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