Paulson Rules Out Aid to Carmakers Under Rescue Plan

Says that the rescue plan would have to be amended to make funds available

U.S. Treasury Secretary Henry Paulson on Nov. 12 ruled out the possibility of using part of the $700 billion rescue plan to help the struggling auto industry. Paulson said the Troubled Asset Relief Program was targeted to the financial sector and thus could not be used to bail out carmakers unless Congress amends the plan.

"We care about our auto industry in the U.S. They are a key part of our manufacturing industry," he said, but added that "the intent of the TARP was to deal with the financial industry."

Paulson pointed out that legislation passed recently included $25 billion to help automakers retool to make more fuel-efficient vehicles, although those funds cannot be used for immediate short-term cash needs.

"One option would be to amend that bill to make it available," he said. "We need a solution but the solution has got to be one that leads to viability," he added.

Copyright Agence France-Presse, 2008

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