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The compromise may come too late to pass Congress this week, after supporters could not garner enough support to use $25 billion from the $700-billion financial industry bailout, even after two days of testimony by Detroit auto executives warning of their industry's imminent collapse.
House Majority Leader Steny Hoyer, D-Md., said earlier this week it was possible that the House could come back in December as well. General Motors Corp. and Chrysler LLC could run short of cash by the end of the year.
Before the Senate can consider an auto bailout, it will have to close debate on an extension of unemployment insurance, a move that requires 60 votes. If that succeeds, the industry aid could be offered as an amendment to the bill. Even if approved, it would still need to be passed by the House, which is scheduled to depart today.
"It may be necessary to come back after Thanksgiving," Reid said this morning. "Everyone just stay tuned and we'll do the best we can."
The compromise being worked on by Michigan Sen. Carl Levin and Sen. Christopher Bond, R-Mo., would use the $25 billion set aside by Congress in September for retooling auto plants over the next several years and lend it to automakers immediately.
Automakers would face strict conditions on using the money, similar to what financial firms faced under their bailout, and as they repaid the loans, the money would go back into the retooling fund.
Democrats have been opposed to using the retooling money, saying it was needed to speed the development of fuel-efficient vehicles under tougher mileage standards. A couple of senators have suggested delaying the mileage standards to give Detroit automakers a break, but no bill proposing that has been presented so far.
Contact JUSTIN HYDE at 202-906-8204 or jhyde@freepress.com.
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