The House of Representatives approved a $14 billion government lifeline for the auto industry, but the proposal now faces stiff Republican opposition in the Senate. The plan passed 237 to 170 late on Dec. 10 following several hours of intense debate, and after senior Democrats in Congress and the White House hammered out a bridge loan deal to rescue the Big Three automakers.
The rescue funds for the bailout are to be drawn from a loan program set up previously to bankroll the development of fuel-efficient cars. The initial plan called for up to $15 billion but in the end lawmakers chose to leave some funds remaining in the loan program for use by smaller companies.
At the end of floor debate, House Speaker Nancy Pelosi said the legislation would serve as "a jumpstart for an industry and our country's economic health." The bill "sets us on a new path to viability. It is a test. And we will soon see in a matter of weeks if the executive suites in Detroit are willing to make the choices" laid out in the legislation. "We want to throw a lifeline for success. We do not intend to afford life support," she said, warning that auto industry bankruptcy would send U.S. manufacturing "down into a deep pit."
The Auto Industry Financing and Restructuring Act calls for emergency government loans to the car companies within days to be overseen by a "car czar" appointed by outgoing President George W. Bush. In return, automakers by March 31 would have to cut costs, settle debts and make other changes to show a path to profitability or face possible bankruptcy. The government could choose to revoke the loans if the companies fail to make progress, or could refuse further assistance after March 31 if the Big Three have no promising survival plan, officials said.
House Majority Leader Steny Hoyer said it was critical that the government bailout proceed. But there were serious doubts voiced by Republicans, who warned the intervention was doomed and would only postpone a day of reckoning for the car companies and autoworkers' union.
Republican Senate Majority Leader Mitch McConnell said the rescue bill would be considered by the Senate by the end of the week.
Copyright Agence France-Presse, 2008