By Joseph J. Schatz and Alan K. Ota CQ Staff
Published: 12-10-08
White House and congressional negotiators were near a final deal on a $15 billion auto industry bailout late Tuesday bridging many of the most contentious oversight issues but it remained unclear how skeptical Senate Republicans would react.
“This gets us to the 20-yard line but getting over the goal line will take a major effort particularly in the Senate where we need 60 votes” Sen. Carl Levin D-Mich. a key industry ally said in a statement. “We will need the personal involvement of President Bush and President-elect Obama to reach our goal of securing bridge loans to ensure America’s auto industry is not only viable but vibrant in the years ahead.”
Earlier in the day Senate Majority Leader Harry Reid D-Nev. backed off predictions that a vote could come as early as Wednesday threatening to keep the Senate in session through the weekend if necessary to act on an emergency loan package.
“We’re going to have a vote on this sometime” Reid said. “We can have it sooner or we could have it later.”
Sen. John Ensign R-Nev. earlier said he was prepared to put a hold on the plan unless significant changes were made spokesman Tory Mazzola said. Ensign is concerned that the negotiating process has been too partisan — it has included Democrats and the White House but not congressional Republicans — and that the legislation would do too little to force the automakers to change their long-term labor-related financial obligations to become more competitive globally Mazzola said.
To get the 60 votes required to overcome procedural hurdles Democrats will need to get 11 to 12 Republican votes a Senate Democratic aide said. The vote-counting process was complicated by the fact that some senators were scheduled to leave late Wednesday on overseas trips which Reid said were for official business.
Various draft versions of a bill have been exchanged and discussed by the White House and Democrats on Capitol Hill.
There is agreement on the broad parameters of the legislation which would send $15 billion in short-term emergency loans to U.S. automakers and put one or more presidentially appointed administrators in charge of negotiating a long-term industry restructuring.
A provision pushed by House Speaker Nancy Pelosi D-Calif. that would prohibit participating automakers from fighting state fuel efficiency regulations was one sticking point late Tuesday.
As committee leadership and White House staff met in Pelosi’s office into the evening Democrats appeared to move toward the White House and GOP position on requiring the government to cut off funding for automakers that fail to make progress in restructuring rather than just giving the government the option to do so.
A provision designed to prevent the automakers from using federal money to move operations overseas was modified. It would require firms taking the loans to submit for government approval every proposed transaction involving more than $100 million up from a $25 million threshold that had raised administration concerns.
Sen. Debbie Stabenow D-Mich. a staunch auto industry advocate said Tuesday that another sticking point was White House opposition to using the $700 billion financial industry bailout program (PL 110-343) to aid the auto companies’ financing arms.
Lawmakers React
House Democrats had a mixed response during an hourlong caucus meeting devoted to the rescue package.
“The room was pretty supportive” said Financial Services Chairman Barney Frank D-Mass.
But several lawmakers at the session raised concerns about allowing federal loans to benefit Cerberus Capital Management the private owner of Chrysler LLC. The firm has come under heavy criticism for its management of Chrysler. The lawmakers suggested that funds would be better spent on companies with publicly traded stocks such as General Motors Corp. and Ford Motor Co. which has said it doesn’t foresee needing to tap the loans.
Aides involved in negotiations said they were working on language to ensure that taxpayer money could be recovered from Cerberus if Chrysler goes bankrupt.
Frank said he thought that Chrysler should be covered by the rescue package. “Some people had the feeling that you could punish Cerberus by threatening to let Chrysler go under” he said. “I don’t think that would change Cerberus. They’ve thrown the money in. I don’t think threatening to let Chrysler go bankrupt gives you any leverage to get Cerberus.”
Rep. Christopher S. Murphy D-Conn. said Frank presented an outline of the plan to the caucus and that Pelosi participated.
“It was not tilted one way or the other in terms of supporting it or being against it. Everyone was asking questions about it. They wanted more details” Murphy said.
Reid brought three House-passed tax bills (HR 7005 HR 7006 and HR 7060) to the floor to serve as placeholders for the auto legislation. “I think it would be to everyone’s advantage that we move first” he said.
House leaders already have been burned once since corporate bailouts became the norm on Capitol Hill: The financial industry bailout bill failed on the House floor in September helping send the stock market into a nosedive.
The House Rules Committee approved a same-day rule late Tuesday that would allow for auto bailout legislation to be quickly considered on the floor if leaders decide that the House should move on it first.
But the key question was the Senate.
Senate Majority Whip Richard J. Durbin D-Ill. said it was unclear how many votes supporters of an auto industry bailout could muster especially from Republicans.
Democrats argued that the ball was in the Republicans’ court.
“We hope to hear more soon about whether they will give us consent to do this quickly or insist that we run out the clock” said a Senate Democratic leadership aide. “In short we will be in as long as it takes to complete action on this.”
Early on Tuesday Senate Minority Leader Mitch McConnell R-Ky. criticized key parts of a draft bill that had been circulated Dec. 8 underlining the trouble supporters may have overcoming opposition from Senate Republicans.
“We will reserve our judgment until we see the latest text. But the proposal we saw Monday fails to achieve our goal of securing the long-term viability of ailing auto companies” McConnell said.
The plan “fails to require the kind of serious reform that will ensure long-term viability for struggling auto companies” or require “any serious reform of legacy costs” from organized labor he said.
While support is expected from Rust Belt Republicans even Sen. George V. Voinovich R-Ohio who has been a strong supporter of the industry rescue expressed reservations about the emerging plan Tuesday.
“One of my concerns is that this bill doesn’t go far enough to secure viability plans from the auto companies that would best ensure that the money will be paid back to the taxpayers” he said in a statement.
“I am also concerned with other provisions that could hurt the auto industry in the long run” Voinovich added without elaborating.
Kathleen Hunter Catharine Richert and Benton Ives contributed to this story.
