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House Plans To Aid Automakers

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The Associated Press

Published: November 16, 2008

WASHINGTON - House Speaker Nancy Pelosi said Saturday the House would provide aid to the ailing U.S. auto industry, requiring that the industry meet new fuel-efficiency standards, produce advanced vehicles and restructure "to ensure their long-term economic viability."

Pelosi, D-Calif., did not disclose the amount of funding House leaders intend to seek for the industry - automakers have been asking for $25 billion in loans to stabilize their sinking companies. But she said the funding should come from the $700 billion financial bailout approved by Congress in October.

The move sets up a conflict with the White House, which has opposed using the bailout funds to help General Motors, Ford and Chrysler.

U.S. automakers are lobbying lawmakers furiously for an emergency infusion of cash. GM has warned it might not survive through year's end without a government lifeline.

President-elect Barack Obama said he thinks that aid is needed but that it should be provided as part of a long-term plan for a "sustainable U.S. auto industry" - not simply as a blank check.

"For the auto industry to completely collapse would be a disaster in this kind of environment," Obama said in an interview with CBS's "60 Minutes" that will air today. "So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all of the stakeholders coming together with a plan - what does a sustainable U.S. auto industry look like?"

Pelosi said the plan would include "even stronger limits on executive compensation and assurances to protect the taxpayer." House aides said the legislation was being developed and a specific funding level had not yet been reached.

Auto suppliers and dealers with showrooms empty of customers plan to join the effort Monday. The key Senate vote on preventing opponents from blocking the package could occur as early as Wednesday.

Democrats are modeling their bill on the bailout terms the Bush administration used for doling out $290 billion to banks and insurance companies. The government would get an ownership stake in the auto companies in exchange for the loans to ensure that taxpayers would get their money back if the companies return to profitability.

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