$14 billion auto bailout bill passes in House but a tough battle looms in the Senate

December 11, 2008

WASHINGTON (ChattahBox) — The House of Representatives passed a bill Wednesday night by a vote of 237 to 170, that would provide up to $14 billion in bridge loans to automakers, but Republican opposition cast doubt about the bill’s fate in the Senate later this week. The legislation would let GM and Chrysler draw on $14 billion of loans while they develop restructuring plans required by March 31.

The stopgap measure, is designed to let the new Congress and incoming administration of President-elect Barack Obama craft a long-term solution. It would create a government “car czar,” to be named by President George W. Bush to dole out the loans, with the power to force the carmakers into bankruptcy next spring if they didn’t cut quick deals with labor unions, creditors and others to restructure their businesses and become viable. The debate over the automaker bailout in Congress has become a race against the clock. Without the aid, the two companies would likely have to declare bankruptcy by the end of the year.

Republicans were in full revolt against their party’s lame-duck president over the measure, balking at helping Detroit’s struggling Big Three without hefty concessions from autoworkers and creditors, and furious about an environmental mandate House Democrats insisted on including in the measure. House Democrats used language requiring that autos meet stricter “applicable” fuel efficiency and emissions standards — which would cover consideration of state standards such as those adopted in California and New York — while the Senate version of the bill calls for vehicles to meet “federal” standards, which are not as high as some state benchmarks.

Republicans said yesterday the House measure wouldn’t give the czar enough authority to order cost cuts and other changes. They argued that only a restructuring under bankruptcy protection can make the companies more competitive.


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