Vote on automaker deal could be today

Bailout faces opposition from congressional Republicans

December 10, 2008|By New York Times News Service


Congressional Democrats and the Bush administration were on the brink of an agreement early this morning on a taxpayer rescue of the American automobile industry, with a vote in the House expected as soon as this afternoon.

But with less than six weeks left in President George W. Bush's term, it was unclear whether the White House would be able to generate Republican support for the proposal. That support will be crucial in the Senate, where, for procedural reasons, the bill needs 60 votes to advance.

A group of Republican senators likely to oppose the bailout plan scheduled a news conference for today, raising the prospect of a legislative battle that could keep the Senate in session into next week.

Republican aides said White House chief of staff Joshua B. Bolten would make an unusual appearance today at the weekly Senate Republican lunch to sell the plan to reluctant legislators.

The rescue plan would extend $15 billion in emergency loans to General Motors and Chrysler, the two most imperiled automakers, and would subject them to far-reaching government oversight at the direction of a "car czar" to be named by Bush.

Ford is not seeking short-term loans because it is not as bad off as the other two big automakers.

By yesterday evening, White House and Democratic congressional negotiators, meeting at the Capitol, had narrowed their differences to one major issue: whether to bar automakers from fighting state laws that seek to limit greenhouse gas emissions.

Senior congressional aides said that one of the more complicated aspects of the talks related to Chrysler's unusual corporate structure: 80 percent of the company is owned by Cerberus, a private equity firm, and 20 percent by Daimler.

The aides said that negotiators were near agreement on a plan to hold Cerberus liable, as Chrysler's parent company, for any losses the government might face in connection with the emergency loans and to require the firm to make taxpayers whole.

A senior administration official said the bill would set a firm deadline of March 31 for the car czar to certify that the automakers had agreed to carry out a long-term viability plan and that the bill would set out "a hard economic definition of what it means to be a viable firm."

The official said that if there were no such agreement, the auto czar would be required to demand repayment to the administration rather than giving the czar discretion to call in the loan, which Democrats had initially proposed. The bill would also allow the auto czar to impose a viability plan, which could force a company into bankruptcy.

"There are a lot of people who are arguing the only way these firms will become viable is through Chapter 11," the official said. "You have got a chance to negotiate, but if you don't, the president's designee must come forward with a plan ... including, potentially, Chapter 11 reorganization."

The auto bailout legislation would give the government stock warrants in the automakers, allowing taxpayers to profit should share prices rise. The bill would bar shareholder dividends, executive bonuses and "golden parachute" severance packages.

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